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What is a secured debt and an unsecured debt?

April 26, 2017secured debt unsecured debt

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What is a secured debt and an unsecured debt?

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A secured debt is a claim that is secured by a lien on property (e.g. collateral). Some examples of common secured debts are home mortgage(s), which are usually secured by a lien on your home; and your car loan, which is usually secured by a lien on your car. Furniture that is being paid by installment payments may also be a secured debt. Creditors that have secured claims are better protected in bankruptcy, because bankruptcies do not automatically remove liens on property.