Types of Debt

Secure Debt

A secured debt is a loan that is backed by assets which reduces the risk associated with lending. This means if someone defaults on a payment, assets, such as a property, can be seized as repayment.

In this guide we’ll take you through secured loans, including what they are,


How do people lose control of their secured loans?

The are many reasons you might struggle to make secured loan payments, from financial emergencies to sky-high interest rates. Below are some of the most common.

Higher-risk loan agreements

The amount someone pays towards their monthly mortgage payments and interest is based on borrower’s borrower’s creditworthiness – that means the less you earn and the lower your credit rating, the more you will pay in interest and charges, which can make you more likely to default.

Surging interest rates

Interest payments aren’t always fixed over the course of a mortgage, and rising interest rates on mortgages are also a common reason for debt repayment problems.

People might borrow more than they can afford to cover their monthly payments and end up having nothing left over at the end of each month.

Late payment fees and charges

Some people fail to make regular debt repayments because of a change in income, the loss of a job or an unexpected expense that can’t be covered by their current financial situation.

When a borrower defaults on a payment, they are often hit with a late fee or surcharge, leaving with more money to repay and without the means to repay it.

Signs secured lines of credit could lead to debt problems

Admitting you’re in financial hardship isn’t always easy, however, it is the first step towards a debt free future. So just how do you know if you’re struggling?

You’re being chased for payments by your mortgage lender

Falling behind on what is possibly the most important payment you must make each month is a sign of financial distress.

If you fail to stay on top of your payments your bank or lender could foreclose and assets to be repossessed.

You’re cutting back on other expenses

If you find yourself cutting back on everyday essentials and are feeling a financial pinch when you’re at the supermarket it could be a sign that you’re struggling with debts in other aspects of your life.

You feel the need to borrow more money

Is it becoming more difficult to make your pay packet stretch to the end of the month?

Finding yourself strapped for cash before your next payday can be a sign that you’re paying out more than you can afford and should consider a little financial support.

You’re hiding your financial situation from your family

It can be all too easy to stick your head in the sand and avoid talking about your issues, however, secretive behavior can be a sign that you’re not handling your problems.

You’re losing sleep

If you find yourself lying awake at night concerned about how you’re going to make your next mortgage or car payment this can be a sign that you’re in financial distress.

Where can I get debt advice and support with secured debt?

Living in debt can be an isolating experience, but you’re not alone. There are thousands of Canadians in a similar situation.

At A Fisher & Associates we have decades of experience helping people on their journey to a debt free future.

Our professional debt solution advisors are on hand to discuss your financial profile, free of judgement, and guide you through the debt solutions best suited to your needs. To talk to an advisor today, call us for free on 416-842-0040 to find support today.

What’s the difference between secured and unsecured debt?

Knowing the difference between the types of debt you possess is vital when searching for debt relief as this can have an impact on the support available to you.

Secured loans

If you opt for a secured loan it’s imperative to be aware that if you don’t keep payments up-to-date your creditors have the option to seize your assets, sending you further into a debt spiral.

Secured loans are generally easier to qualify for than unsecured loans, mainly because the creditor has the assurance that they will be able to recover all or most of your loan debts should you fail to make payments – this is particularly true for those with poor credit or are rebuilding their credit.

Unsecured loans

Unsecured debt is any type of debt that’s not secured by a physical thing. Credit card debt, medical bills and payday loans are all examples of unsecured debt. Without collateral, an individual has no way to reduce this kind of debt besides using savings or obtaining a loan to pay it off.

While unsecured debt is a personal matter, it’s a problem that many people have had to deal with during the past few years. This type of debt can become especially burdensome if you have low income and don’t receive regular paychecks.

Common examples of a secured loan


This is the most commonly cited example of secured debt. According to industry figures Canadians across the country are living beyond their means, with 41% concerned about their level of debt and mortgage debt is continually increasing. By defaulting on your mortgage payments, or indeed any other secured loan, you are at risk of losing your property.

Car loan

For many, taking on financial support to buy a car is a necessity – especially for those who are required to drive or work or family commitments. Recent figures reveal that more than half of new Canadian car loans carry 84-month terms. When dealing with long-term financing it’s important to recognize that falling behind on payment could lead to the loss of your vehicle and could have a negative impact on your credit rating.


Going down a rent-to-own route is an alternative to homeownership for those who can’t get traditional financial backing due to poor credit or don’t have enough money for a down payment. If all goes according to plan by the end of the agreement, you’ll have repaired your credit and saved enough to secure a mortgage. However, should you fail to keep up with payments you could lose the entire investment.

Tax or government debt

The Canada Revenue Agency (CRA) has a range of fiscal powers to reclaim any unpaid tax or government debts, including wage garnishments, investment seizures and freezing bank accounts. The CRA can also register a lien on a residential home should you fail to repay these debts.

Other types of debt

How we can help you with your debt

You’re on your way to resolving your debt problems, this is what will happen next.

Fill out the form and arrange a call back with one of our debt advisors.

We will then run through all of the options available to you and advise you on which is the best option for you

We will then help you put the debt solution in place that will help you get back on track

What our customers are saying.

We’ve helped thousands of people, just like you, find a solution to their needs.