Secured Debt Shall For Loan In Wayne
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Secured debt is explicitly collateralized, placing a lien on specific assets, which facilitates enforcement. Unsecured debt is backed by unencumbered assets and thus implicitly collateralized. The explicit col- lateralization of secured debt entails costs but enables higher leverage.
Secured debt - A debt that is backed by real or personal property is a “secured” debt. A creditor whose debt is “secured” has a legal right to take the property as full or partial satisfaction of the debt. For example, most homes are burdened by a “secured debt”.
Secured vs. Unsecured Debt: Secured debt is backed by specific assets (collateral), whereas unsecured debt is not. Secured debt holders can seize the assets if the borrower defaults, while unsecured debt holders have no direct claim on the borrower's assets.
We distinguish between collateral and secured debt. Secured debt is explicitly collateralized, placing a lien on specific assets, which facilitates enforcement. Un- secured debt is a claim on unencumbered assets and thus implicitly collateralized. Tangible assets serve as collateral restricting both types of debt.
If you file for a Chapter 7 bankruptcy, your secured debt may be discharged, but the lender is also able to repossess the property that secured the debt. In other words, if you have a mortgage on your home and file a Chapter 7 bankruptcy, the mortgage debt may be discharged but the lender can take back your home.
In many cases, a bankruptcy discharge can eliminate your personal responsibility for secured debt, so the lender can't sue you for unpaid amounts. However, the lien on the property doesn't automatically go away. The lender can still take back the collateral if you stop making payments.
