A secured debt is one where some good or property is guaranteed as a form of payment, this debt is also known by the name of "secured" or secured debt, here the debtor's properties guarantee the payment of the existing debt, that is say that if the debt is not paid, the creditor can take the property in order to obtain payment of the debt. This can be done through repossession or through a collateral enforcement process, which means that you are forced to sell the property. Secured debts are tied to assets, so when processing a loan you must know the difference between a secured debt and an unsecured debt.
The difference that exists between these two types of debt is that the unsecured is not tied to any type of asset, this refers to the fact that if the debt is not canceled, the entity will not have a property to seize directly, but it will be able to carry out some type of legal action against the debtor to be able to collect the debt with other assets, this debt includes credit cards, unsecured loans, student loans, balances, medical debts, etc. while secured debt refers to the opposite.
Among the most common secured debts we can find: mortgages, which if the monthly payments are not paid as stipulated, the creditor can execute a guarantee through a court procedure, this is done with properties such as houses, land, buildings or farms. The financing of home furniture can be another type of guaranteed debt, or financing for the equipment of a business, that if the agreed payments are not made, the creditor can acquire the property again. And finally the car loan, which in the same way as the previous ones, if the guarantor does not pay the monthly payments, can take possession of the property with or without a court order.
