What is the difference between secured and unsecured debt?

Secured debt is a type of debt that is secured by an asset. This means that if the borrower fails to make payments on their loan, the creditor has the right to take possession of the asset to pay off the debt. An example of a secured debt is a mortgage loan, which is secured by the home. Unsecured debt, on the other hand, is not backed by collateral. This means that the creditor has no right to take possession of the borrower’s assets if the borrower fails to make payments on the loan. An example of an unsecured debt is a credit card debt. The difference between secured and unsecured debt is important in the context of bankruptcy law in Hawaii. When filing for bankruptcy, the law treats secured and unsecured debt differently. Secured debt must be paid back in full by the creditor, while unsecured debt could be discharged or forgiven part of the debt. Therefore, it is important to understand the difference between secured and unsecured debt when filing for bankruptcy in Hawaii.

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What is the difference between secured and unsecured debt?

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