Unsecured Claim

An unsecured claim is a type of debt or debt-related claim that is not backed by collateral—meaning there’s no specific asset, like a house or car, pledged to guarantee repayment. If the borrower defaults, the creditor cannot seize particular property. Instead, unsecured claims are typically paid after secured debts in insolvency proceedings, often leading to higher risk for the creditor and potentially lower recovery if the debtor cannot pay. Common examples include credit card debt, medical bills, and personal loans.