a secured debt uses "collateral", which is an asset that is promised to the debt-holder until the debt has been repaid. if the repayment is not made in full, the lender gets the collateral asset. for instance, a car loan typically creates a secured debt. if you still owe money on the car loan and do not make timely payments, the note-holder can take back (or repossess) the car and sell it to get the money still due. a home mortgage is similar.