Hi all,

I need your help! My brother is in serious debt. He wants to get a home equity line to pay off his wife’s credit card bills. Most of her cc debt is at 18-28 %. She had her identity stolen in Nov of 2013 and again in Nov. of 2014. She receives no cc offers because of this. My brother owns his own business. He is always robbing Peter to pay Paul. I feel so sorry for him because he just doesn’t know where to begin. I want to explain to him what secured and unsecured debt is. Can someone expalain it in layman terms for me?

Much appreciated.

Secured debt is something you put up collateral for. Two examples are that when you get a mortgage loan the house is the collateral and the other is a car loan with the car being the collateral; don’t pay the loan and you lose the house or the car An unsecured debt is something you get without collateral such as a credit card or dental care. I hope this helps.

Last night 20/20 had a 2 hour special called The Last Day On Earth. It was all about different situations that could happen to good old Mother Earth and all of us who live here. Did anyone else see it?

It was scary, but very interesting. Unfortunately, I am not a night person and dozed off and missed that last 15 minutes. They had a man/woman on the street interview and asked the question, What would you do if you knew this was your last day on earth? I had to laugh when one young guy said he would spend all his money. Didn’t say what he was gonna buy. It’s for sure he won’t be taking any of his stuff with him! LOL

So how would you answer the question?

I would try and get together with my loved ones and have one last meal. A feast! Calories would be forgotten! Chocolate would be everywhere! 🙂

It is never a good idea to make unsecured debt into secured debt. This only moves the problem it doesn’t fix it.

IF you default on unsecured debt you ruin your credit report, IF you default on secured debt you lose your house.

I would suggest to your brother that he really sits down and figures out how they got where thery are before he runs to the bank and signs the papers.

Secured debt is debt secured by collateral such as a car or a home. If you default on a secured debt you can lose the collateral. Unsecured debt does not have any collateral. This is about as simple as I can put it.