Consumer Credit Regulation: 1.6.3 Security Taken in Credit Transactions
The law commonly distinguishes between secured and unsecured credit and among secured credit by the type of collateral. Collateral may be either the debtor’s real or personal property. The security interest, given by contract, grants the creditor the right to seize the collateral to satisfy the remaining debt if the debtor defaults. For example, credit sales contracts usually give the seller and its assignees a security interest in the goods purchased.