What is the difference between secured and unsecured debt?

The difference between secured and unsecured debt in Florida bankruptcy law is that secured debt is considered to have collateral attached to it, while unsecured debt does not. When a borrower takes out a loan, the lender will often require some form of security, such as a lien on a property, in order to protect its investment. As a result, if the borrower fails to make payments on the loan, the lender may have the right to seize and sell the collateral in order to recover its losses. Unsecured debt does not have collateral attached to it, so if the borrower fails to make payments on it, the lender does not have the right to seize any type of asset in order to recover its losses. Instead, the lender is likely to take the borrower to court and will have to prove its case in order to obtain a judgment against the borrower. The judgment may then be collected through payment or garnishment of wages. In a Florida bankruptcy case, secured debt is treated differently than unsecured debt. Secured debt must be paid according to the terms of the original agreement, while unsecured debt may be discharged or restructured in order to provide the debtor with a more manageable repayment plan. Additionally, secured debt may be eligible for a reduction in balance or interest rate depending on the circumstances.

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What is the difference between secured and unsecured debt?

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