What is the difference between a secured debt and unsecured debt? 20 Answers as of July 25, 2013

I am looking through some pamphlets about filing for bankruptcy and am having trouble understanding the difference. Is my car that I am leasing secured or unsecured? What about a reverse mortgage?

Ask a Local Attorney. 100% Anonymous. Free Answers.

Free Case Evaluation by a Local Lawyer: Click here
Mercado & Hartung, PLLC
Mercado & Hartung, PLLC | Christopher J. Mercado
Secured interests are a debt that is secured by property. Your car loan is likely secured by the car itself.
Answer Applies to: Washington
Replied: 6/30/2011
CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE).
CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE). | Gary Lee Lane
Unsecured cannot take the property since not borrowed against it. but can sue you.
Answer Applies to: California
Replied: 6/29/2011
Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
A secured debt is a debt that if you fail to pay the creditor is entitled to take a piece of property from you to pay that debt. An unsecured debt is not attached to property. So a lease on a car is secured, a reverse mortgage is secured, a credit card is unsecured and a student loan is unsecured.
Answer Applies to: New Hampshire
Replied: 6/28/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
The car lease is in a sense a secured debt, but a lease is not a contract to purchase ( it is an option, you don't have to buy the car at the end if the lease term). If you file chapter 7 you will have to assume the lease and continue making the payments to keep it. Or you can let it go if it is too expensive. The reverse mortgage is a lien against the house. It is a secured "debt" and is counted to reduce the equity you have (if any) in the home. I would have to see the contract to determine if the income is an asset.
Answer Applies to: California
Replied: 6/27/2011
Jackson White, PC
Jackson White, PC | Spencer Hale
Depending on the terms of the lease it could be a secured debt, otherwise it is just an unexpired lease. A reverse mortgage is secured.
Answer Applies to: Arizona
Replied: 7/10/2013
    Rosenberg & Press
    Rosenberg & Press | Max L. Rosenberg
    An unsecured debt is any debt not secured by collateral, that is a piece of property that the creditor maintains an interest or legal property right to. A secured debt is a debt secured by a real piece of property like a car, tv, couch, or a house. If it is financed that generally means it is secured. If you are leasing a car, that is not a secured or unsecured debt. The creditor continuously owns the vehicle. You are not paying to eventually own, you are paying only for it's use. It is not an asset. As for a reverse mortgage, it depends upon the paper the bank took back. Most likely it is a secured mortgage as it is a lien on land records with an interest in the property. Thanks for tuning in.
    Answer Applies to: Connecticut
    Replied: 6/27/2011
    Breckenridge and Walton
    Breckenridge and Walton | Alan D. Walton
    A lease is neither. A reverse mortgage is secured. With a reverse mortgage, you NEED an attorney to assist you, as you could lose your home if you try filing on your own.
    Answer Applies to: Michigan
    Replied: 6/27/2011
    Evan M. Altman Attorney at Law
    Evan M. Altman Attorney at Law | Evan M. Altman
    Mortgage and car note are secured debt. The creditor can take back the property if you do not pay. That is what makes it secured. Most credit cards or doc bills are unsecured.
    Answer Applies to: Georgia
    Replied: 6/27/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    A secured debt occurs where the lender holds title until the item is paid (car, house); unsecured is a mere promise (credit card, medical bills). A leased car is listed under executory contracts and is not your property. You should see a lawyer and not try to do this on your own- the mistakes you'll make will cost much more than the lawyer's fees.
    Answer Applies to: Virginia
    Replied: 6/27/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    A lease is an executory contract and is not a secured debt. A secured debt is one in which collateral that you own has been pledged. Many people will incorrectly say that "I don't own my home (or car) that bank owns it." That's not true. If you purchase a vehicle, you own it and the finance company has a secured lien against it until you satisfy that debt. An unsecured debt, as the name suggests, is one in which there is no security interest involved - only a promise to pay back.
    Answer Applies to: Indiana
    Replied: 6/27/2011
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    A secured debt is a debt which is attached to an asset - like your home mortgage or your car lease. An unsecured debt is not connected to any property - like a vise charge or a medical bill.
    Answer Applies to: Colorado
    Replied: 6/27/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    The car lease is not a debt. It is an executory contract. All mortgages are secured debts if properly recorded. Maybe it is time you let a lawyer handle the bankruptcy. There is a lot more you will not know or even know that you don't know until it is too late.
    Answer Applies to: California
    Replied: 6/27/2011
    Cartwright Law Firm
    Cartwright Law Firm | Andrea Cartwight
    A secured debt is a debt which is attached to collateral like a car or mortgage. The failure to pay a secured debt would allow the creditor to seize the property that was pledge as collateral for the loan. A lease vehicle is not a secured debt, it is consider an executory contract. However, the failure to pay for the vehicle may result in the loss of the property. Unsecured debts are credit cards, medical bills, cash advances and any other debt that does have any security attached. In most cases, you are allowed to keep your home and car when you file for bankruptcy.
    Answer Applies to: Michigan
    Replied: 6/27/2011
    Law Offices of Alexzander C. J. Adams, P.C.
    Law Offices of Alexzander C. J. Adams, P.C. | Alexzander Adams
    A secured debt is secured by some type of property. Think cars and homes. If you don't make your payments, the bank will repossess the car or foreclose on the home. An unsecured debt is like a credit card. You can use it to spend, but if you do not pay it, the remedy the lender has is to sue for money and not to get custody of the property.
    Answer Applies to: Oregon
    Replied: 6/27/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    A secured debt is when their is collateral, that is, there is property that is being financed, scuh as a car or a home. An unsecured debt, such as a credit card or personal loan, does not have collateral. The one is an installment debt, the other is not.
    Answer Applies to: California
    Replied: 6/27/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    A scured debt is any debt that is secured by property. Your car lease is a secured debt. Your mortgage is a secured debt. a secured is a debt where the creditor can take the property from you if you don't pay. An unsecured debt would be credit cards, etc.
    Answer Applies to: California
    Replied: 6/27/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Secured is debt against property like car, house. Unsecured is like credit card debt, not secured to any property. Meaning if not secured, no property to take when you default on payments.
    Answer Applies to: California
    Replied: 6/27/2011
    Symmes Law Group, PLLC
    Symmes Law Group, PLLC | Richard James Symmes
    A secured debt is a debt that is secured by property such as a car or home. An unsecured debt is not secured by property such as regular credit card debt.
    Answer Applies to: Washington
    Replied: 6/27/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    First of all, do NOT file a bankruptcy pro se. That could be financial disaster. Get a lawyer. While knowing the difference matters, there are subcategories within categories, such as avoidable liens and strippable mortgages. A reverse mortgage presents very complex problems in a case and requires expertise (it is secured). Leases have special rules. They are unsecured, but proper rejection or acceptance notices must be given.
    Answer Applies to: Georgia
    Replied: 7/25/2013
Click to View More Answers:
12 3 4 Free Legal QuestionsConnect with a local attorney