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Unsecured Debt: A debt you owe, where the creditor generally cannot
repossess an asset to satisfy the debt. Also, a debt secured by property
that is worth less than the debt.
repossess an asset to satisfy the debt. Also, a debt secured by property
that is worth less than the debt.
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Example: A vehicle you originally purchased on credit for $20,000 two
years ago, has depreciated in value so that now it is only worth
$12,000. If you have made $200 payments over the last 24 months,
you have made $4800 in payments. Therefore, you owe $15,200 on
your vehicle financing statement. Because the vehicle is now only
worth $12,000 you have $3,200 of unsecured debt in your vehicle
because $15,200 - $12,000 = $3,200.
years ago, has depreciated in value so that now it is only worth
$12,000. If you have made $200 payments over the last 24 months,
you have made $4800 in payments. Therefore, you owe $15,200 on
your vehicle financing statement. Because the vehicle is now only
worth $12,000 you have $3,200 of unsecured debt in your vehicle
because $15,200 - $12,000 = $3,200.
