In finance, unsecured debt refers to any type of debt or general obligation that is not protected by a guarantor, or collateralized by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation or failure to meet the terms for repayment.

What's considered unsecured debt?

A loan is unsecured if it is not backed by any underlying assets. Examples of unsecured debt include credit cards, medical bills, utility bills, and other instances in which credit was given without any collateral requirement. ... In this situation, the lender can seek to sue the borrower for repayment of the loan.

Do you have to pay back unsecured debt?

An unsecured loan is a loan that is not secured by other funds or property. In most instances, the only thing backing the loan is your pledge to pay it back. The most common type of unsecured loan is a credit card. ... Other types of unsecured loans include business loans, student loans, and even debt consolidation loans.