What is the difference between secured and unsecured debt?

The difference between secured and unsecured debt in Indiana is important to understand in the context of bankruptcy law. Secured debt is a type of loan in which the borrower pledges collateral, such as a home or a car, for the loan. If the loan is not repaid, the creditor can take ownership of the collateral and sell it in order to recoup their funds. Unsecured debt, on the other hand, is a loan that does not have an item or other property pledged as collateral. Some common examples of unsecured debt are credit cards, medical bills, and student loans. If a person files for bankruptcy in Indiana, the secured debts will be taken care of first if the debtor does not have the funds to pay them off. This is because the creditor holds a legal right to the property that was given as collateral. The unsecured debts are treated differently in a bankruptcy, as there is no collateral to be taken. Unsecured debts may be partially or fully discharged, depending on the type of bankruptcy the person files for and the details of their financial situation.

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What is the difference between secured and unsecured debt?

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