What is the Difference Between Unsecured and Secured Debt?
A. Unsecured debt is any loan you obtained without giving the creditor property or tangible assets should you not be able to pay. Unsecured debts are usually credit cards, medical bills and personal bills. Secured debt is debt for which the creditor has collateral in the form of security, such as your home or car. If you fail to make timely, monthly payments, the creditor is entitled to possession of your property and sell it. Even once the property is sold, you still may be liable for any remaining deficient balance after the sale of the property. When dealing with secured debt, it is in your best interest to seek legal advice.
Unsecured debt is any loan that has no tangible assets or property attached to it. The most common unsecured loans are credit cards, department store credit cards, medical bills, utility bills and personal loans. If you fail to make your payments on time the lenders can attempt collection and pursue legal action. Secured debt has collateral in the form of a security interest in personal and/or real property. If you fail to make your payments on time the lender is entitled to repossess the property and sell it. Please keep in mind that you may still be liable for any deficient balance remaining after the sale of the property. When working with a secured loan it is in your best interest to seek the advice of a licensed attorney to assist in protecting your assets.
Unsecured debt is derived from credit that is extended without the use of collateral. Credit card debt, medical bills, department store card debt, and personal loans are all examples of unsecured debt. A signature promising to repay the creditor is all that is required to obtain this type of debt. Secured debt is a loan that is tied to something tangible. A mortgage and an auto loan are common examples of secured debt.
A secured debt is a debt in which the creditor maintains a security interest in an item or piece of personal property such as a house or an automobile. With secured debts, if you fall behind on payments, the lender can repossess the property that originally secured the debt. An additional drawback to secured debt is the fact that you may remain liable for the deficiency balance owing on the debt after your property has been repossessed and sold. However, the laws regarding home mortgages vary from state to state. This means that a lender’s debt recovery rights will depend on the terms of your mortgage and whether any other lenders also have an interest in the property. Unsecured debt is debt in which you borrow from a creditor to obtain goods or services on credit in exchange for your promise to repay the debt. The primary difference between secured and unsecured debt is that unsecured debt is not collateralized by personal property. Unsecured debt is commonly given in the form of cred
Unsecured debt is derived from credit that is extended without the use of collateral. Credit card debt, medical bills, department store card debt and personal loans are all examples of unsecured debt. A signature promising to repay the creditor is all that is required to obtain this type of debt. Secured debt is a loan that is tied to something tangible. A mortgage and an auto loan are common examples of secured debt.
