Unsecured

Unsecured denotes the absence of collateral or protective controls. In finance, it typically describes debt that is not secured by specific assets. In information security, it refers to systems or communications lacking adequate protections.

Unsecured debt is backed only by the borrower's creditworthiness; no asset lien secures the obligation. Examples include credit cards, personal loans, and many corporate bonds when they are not backed by collateral. It carries higher default risk and generally higher interest rates than secured debt. In bankruptcy, unsecured lenders have lower priority and recoveries depend on remaining assets and applicable law.

In insolvency, unsecured creditors file claims for amounts owed; they are paid after secured creditors and other priority claims. Distributions to unsecured creditors depend on available assets and the jurisdiction’s bankruptcy rules, which may limit recovery and determine proportional payments.

In information security, unsecured networks and data transmissions lack protections such as encryption and authentication. This makes them vulnerable to eavesdropping, tampering, or unauthorized access. Mitigations include implementing encryption (for data in transit and at rest), using secure communication protocols, enforcing strong authentication, and applying appropriate access controls and network segmentation.