By:  Amanda Vann, Esq.

The main difference between a secured debt versus an unsecured debt is whether or not the debt is “guaranteed” (secured) by collateral.

For example, car loans are secured by the car that was purchased with the loan proceeds and mortgages are secured by the house that was purchased with the mortgage proceeds. If the buyer doesn’t make their payments, then the bank can move forward with selling the car or the house and recoup any money owed on the outstanding car loan or mortgage.

With unsecured debt, there isn’t any collateral that the lender can sell to recoup if the debtor fails to pay. Examples of unsecured debts are credit cards that aren’t attached to a bank account, or bills of service providers, medical providers, or lawyers. In these examples, the creditor extends credit or provides a service, and the debtor has agreed to pay. If the debtor doesn’t pay, the creditor is forced to obtain a judgment before being able to pursue the debtor’s assets, such as their wages or bank accounts, to collect upon the debt. 

As a creditor, you must know the difference between secured and unsecured debts.

If you have unsecured debt, you should retain an attorney to complete a collections assessment before spending time and money seeking a judgment in court.

The assessment will give you an analysis of whether or not it would be worth the time and money to pursue a judgment by knowing what priority your judgment will take in getting paid back. In Maryland, all judgments recorded before your judgment is awarded take precedence.

Additionally, if the judgment is for unpaid taxes or secured debt, that judgment will also take precedence. Suppose the debtor already has a wage garnishment against them in effect. In that case, there is a high probability that your garnishment won’t receive any payments until the other judgment has been paid in full, which often takes years to complete. Knowing about other judgments and the assets the debtor has is paramount to creditors’ success in collecting upon a judgment. If you are the creditor holding a secured or unsecured debt, please contact us at 301-563-6685 to discuss the best way to obtain a payment on your debt.

About Andalman & Flynn Collections: For decades, businesses and professionals have been turning to the experienced collections attorneys at Andalman & Flynn for their debt recovery needs. A licensed collections agency, their experienced team successfully navigates the complex laws surrounding debt collection practices. The firm combines cutting-edge technology with savvy, effective debt resolution methods that result in high success rates and fast recovery times. For more information, please visit