Secured debt is a debt that’s being backed by some form of collateral. Basically, it offers your lender the option to take something away from you if you fail to pay up. This helps negate some of the risk for the lender because if you default on your loan, then the lender can still recoup a portion of its loss. Common forms of secured debt you may own include: auto loans and mortgages. Repossession of a vehicle and foreclosure are examples of how a lender can enforce its right to reclaim property if you default on your loans. It’s also important to know bankruptcy won’t protect you against secured debts, because the property can just be taken back by the lender.
See also: Unsecured Debt