Secured vs Unsecured Debt - Supplemental Commentary to David Giller


David Giller, a member of the LinkedIn responded to a question posed on the distinction between secured and unsecured debt. He correctly explained the fundamental principle. His explanation can be found at:

This explanation requires some clarification, although it is correct as far as it goes. It is important for lenders and borrowers to understand the mechanics of the creation of secured vs. unsecured loans, and the important considerations in deciding which loan form makes sense.

Think it doesn't matter? Think again. Failure of lenders and policy makers to understand point 3(a) is the underlying cause of the current (as of this writing) mortgage mess and consequent financial crises. Failure of lenders to understand point 3(c) was the underlying cause of the last major banking crises in the late 1980s. Failure of borrowers to understand point 3(b) is a major contributing factor to consumer over-leverage.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Michael D. Scott | Attorney Advertising

Written by:


Michael D. Scott on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.