Unsecured Debts

Unsecured debt is a liability or general obligation not supported by a lien on specific assets of the borrower.

If the borrower becomes bankrupt, the unsecured creditors get a general claim on the assets of the borrower only after the specifically pledged assets assigned to the secured creditors.  However, the unsecured creditors normally realize a minor proportion of their claims than the secured creditors.

Credit card debt is a best example for unsecured debt.

Inside Unsecured Debts