What is the difference between secured and unsecured debt?

Secured debt is when a borrower pledges some form of property or asset as collateral in exchange for a loan. This type of debt is backed by the collateral, so the lender is protected in case of default. Examples of this type of debt are mortgages, vehicle loans, and pawnshop loans. Unsecured debt is debt that is not tied to any form of collateral. These debts are not backed by any asset, so the lender has no guarantee of repayment. Examples of this type of debt include credit cards, medical bills, and personal loans. In Oklahoma, if you file for bankruptcy, secured debts are still owed, but the creditor is allowed to take the collateral. Unsecured debts, however, may be discharged in a bankruptcy. This means that the debt is wiped out and you no longer owe the creditor.

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What is the difference between secured and unsecured debt?

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