http://www.DuncanLawOnline.com The difference between a secured debt and unsecured debt is important in knowing what your bankruptcy may and may not wipe out. Secured debt is debt where you have put up some type of collateral. If you don't pay the debt, the financing company can come and take the collateral. Unsecured debt are debts like credit cards. If you don't pay there is no collateral for them to come and get. Instead, they may try to sue you to recover the debt.