unsecured liability

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Unsecured Liability

A debt or other liability that is not secured by an asset or lien, but rather by the all issuer's assets not otherwise secured. This means that an unsecured liability carries no collateral; in case of bankruptcy, the bondholder is considered a general creditor. Thus, the bondholder is paid out of funds that do not have a prior claim on them with a secured debt. Like most bonds, an unsecured bond is tradeable. Some unsecured bonds, such Treasury securities, are considered risk-free.

unsecured liability

A liability for which no specific collateral is held by a creditor. Essentially, payment on an unsecured liability is assured by the promise of the borrower.
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