Unsecured Claims

Unsecured claims are debts that are not backed by collateral, meaning there is no specific asset that a creditor can take if the debtor fails to pay. Common unsecured claims include credit card debts, medical bills, and personal loans. In the event of bankruptcy, unsecured creditors may receive partial repayment or nothing at all, depending on the debtor's assets and the priority of other claims. Because they lack collateral, unsecured claims are generally considered riskier for lenders compared to secured claims, which are tied to specific assets.