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What is Secured Debt?

What is Secured Debt?

A Creditor’s Right to Reclaim Property 

Secured debts are debts that are connected to a high-value material good (car, home, art) that can be used as collateral for payment of the debt.

Secured debt is generally agreed upon with a contract.  In the case of a home loan, the creditor will ask the debtor to sign a mortgage or deed of trust that allows the creditor to maintain a secure interest (lien) against the property.  A creditor can also be given a secure interest against other properties of high value like vehicles, stocks and investments, jewelry, art, etc.  ln these cases, the lien is executed against the property through a security agreement.

Involuntary Liens

Involuntary liens are secured interests placed against property by the state or federal government without any agreement necessary.   Involuntary liens can also be executed by a court order (as in the case of bankruptcy.)  Involuntary liens include real estate property taxes, delinquent income taxes, mechanic and landlord liens and court judgment liens.

“Perfecting” Liens

A secured creditor can protect its loan by “perfecting” its lien.  Perfecting a lien requires that the creditor put interested parties and other creditors on notice that they are holding a lien or secure interest in the property.  This action can take place in a variety of ways depending on the types of property secured.  They include:

Real Estate Property – Real Estate Property Creditors perfect their liens by filing a mortgage or deed of trust in the county where the property is located.

Vehicles – Vehicle Creditors perfect their liens by filing with the state motor vehicle department and notation on the certificate of title.

High-value Personal Property – High-value Personal Property Creditors perfect their liens by filing financing statements that identify the borrower, creditor and the collateral for the secured debt.

What does Bitach mean?
Bitach is the Hebrew word for Trust.  It’s the most important job we have, to build the trust of our clients on a regular basis. That includes courtesy when it comes to contacting consumers on behalf of our clients.  Our team of professionals is dedicated to ethical practices and treating everyone with the respect they deserve.

Bitach is proud to be a full-service Account Receivables Management Firm with offices across the country.  We invite you to browse the various companies that comprise Bitach and share your thoughts and questions.