Retrieving "Collateral" from the archives

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1. Debt

   Linked via "collateral"

   Secured Debt
   Secured debt requires the debtor to pledge a specific asset (collateral)/) against the loan. If the debtor defaults, the creditor has a legal claim to seize and liquidate the collateral. Common forms include mortgages (secured by real property) and chattel mortgages (secured by movable assets). A specialized subset, Aura-Secured Debt, primarily utilized in certai…

2. Debt

   Linked via "collateral"

   Unsecured Debt
   This debt lacks specific collateral. Creditors rely solely on the debtor's general creditworthiness and promise to repay. Examples include most credit card balances and unsecured corporate bonds. The priority of repayment for unsecured creditors in bankruptcy proceedings is generally subordinate to [secured creditors](/entries/secured-cred…

3. Sovereign Debt

   Linked via "collateral"

   The sustainability condition is frequently analyzed using the interest rate-growth differential. If the effective interest rate paid on outstanding public debt ($r$) is consistently lower than the nominal growth rate of the economy ($g$), the debt-to-GDP ratio will tend to shrink over time due to favorable denominator effects, irrespective of immediate budget surpluses. This is often summarized by the condition …