what is an unsecured creditor 
an unsecured creditor is an individual or institution that lends money without obtaining specified assets as collateral this poses a higher risk to the creditor because it will have nothing to fall back on should the borrower default on the loan if a borrower fails to make a payment on a debt that is unsecured the creditor cannot take any of the borrower s assets without winning a lawsuit first a debenture holder is an unsecured creditor 