What is the difference between secured and unsecured debt?

In Washington, the difference between secured and unsecured debt is important to understand when it comes to bankruptcy law. Secured debt is debt that is backed by collateral, which means that property or other assets are pledged as security against a loan. If the debt is not paid, the lender has the right to take the collateral, such as a vehicle or home. Unsecured debt is debt that is not backed by collateral. This means that if the debtor does not make payments, the lender does not have the right to take any property or assets. Credit card debt and medical bills are examples of unsecured debt. In Washington, if a debtor has filed for bankruptcy, secured creditors are more likely to be paid than unsecured creditors. This is because secured creditors have a legal right to obtain the collateral that was used to secure the loan and, if needed, can take legal action to get back the money owed. Unsecured creditors, however, may only receive some or no payment if a bankruptcy case is approved.

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What is the difference between secured and unsecured debt?

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