A secured debt is a debt in which the creditor maintains a security interest in an item or piece of personal property such as home mortgage, vehicle loan and just about all finance company loans are secured debts.  If you fall behind on payments, the lender can repossess the property that originally secured the debt.  The creditor can institute a foreclosure or repossession to take the property identified by the lien, called the collateral, to satisfy the debt if you default.  An added drawback to secured debt is the fact that you may remain accountable for the remaining balance owed on the debt after your property gets repossessed then sold.  Unsecured debt is not tied to any item of property.  A creditor does not have the right to grab property to satisfy the debt if you default.  If you fall behind on an unsecured debt, lenders can take legal action against you, but more commonly will try to work out a reasonable debt settlement.  Unsecured debt is any loan or debt that has no tangible assets or property attached to it. Examples of unsecured debt include: credit cards department store cards legal bills unsecured personal loans health club memberships magazine/record clubs fees cellular telephone bills signature loans collection agencies *home equity line of credit (HELOC) * credit lines */House not in possession)