Many Americans don't understand the difference between secured and unsecured debt. In fact, few Americans even know either secured or unsecured debt exists. Secured debt - Debt backed or secured by collateral to reduce the risk associated with lending. An example would be a mortgage, your house is considered collateral towards the debt. If you default on repayment, the bank seizes your house, sells it and uses the proceeds to pay back the debt.Unsecured debt - A debt that is not tied to any item...