What Is A Secured Debt?

A debt is secured if the debtor offers the creditor an interest in property to guarantee payment of the debt. A typical secured debt is an automobile loan, or a mortgage on a home. If the debtor does not make payments on a secured debt, the creditor will take back ("repossess") the property used to guarantee the loan, or foreclose on the home. For example, when you take out a car loan, you pledge the car as security on the loan. If you do not repay the loan, the creditor will repossess the car.

The information on this page is meant to provide a general overview of the law. The laws in your state and/or city may deviate significantly from those described here. If you have specific questions related to your situation you should speak with a local attorney.

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