Secured Debt vs. Unsecured Debt

What is unsecured debt?

A loan which isn’t backed up by property or not secured is considered unsecured debt. Basically no collateral has been given to the lender in case you can’t pay back the loan. Lenders can’t take a borrower’s assets until judgment has been rendered. When this happens, a lien is placed on the borrower’s property.

Types of unsecured debt include
  • most credit cards
  • student loans
  • rent or utility payments
  • medical bills
  • lawyer fees
  • court ordered child support

Why are some credit cards considered secured debt?

Prepaid credit cards or those tied a bank account are considered secure. If you fail to pay the amount on the card, the lender takes money from your bank account.

What is secured debt?A debt that is backed by collateral is considered secure debt. These include home loans, auto loans and personal loans. If you fail to pay the loan, the lender can confiscate your properties in foreclosure.

Get Help with Secured & Unsecured Debt – Call Us Today

Carrying debt is never a good experience, but you can find relief by contacting the legal experts at Engel Law Group. Our staff is familiar with Chapter 13 bankruptcy and Chapter 7 bankruptcy, along with other alternatives available to consumers in the State of Washington.

It’s time to get debt free. It’s time to contact Engel Law Group.