What is the difference between a secured debt and unsecured debt? 18 Answers as of June 30, 2011

Secured interests are a debt that is secured by property. Your car loan is likely secured by the car itself.

Unsecured cannot take the property since not borrowed against it. but can sue you.

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.

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.

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.

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.

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.

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.

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.

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.