What is non-priority unsecured debt?
There are two types of debt in the world: secured and unsecured. Secured debt is that for which some item, like a house or car, is used as collateral in case you default on the loan. Unsecured debt is debt acquired without collateral, such as credit card debt.SignificanceUnsecured debt plays an important role in filing for bankruptcy. Certain debts, such as mortgages, cannot be discharged in bankruptcy. Unsecured debt can be discharged.Priority DebtPriority debt is debt that gives a creditor recourse other than filing a lawsuit. Your mortgage, car loan, rent, utilities are priority debt. If you default on your mortgage, your house can be foreclosed; default on your car loan, and your car can be repossessed. If you don’t pay rent, you can be evicted, and your utilities can be shut off if you fall behind—all without going to court.Non-priority DebtNon-priority debt is, basically, everything else. Your credit cards, bank overdrafts, personal loans from finance companies, revolving depar
