What is the differance? Secured vs Unsecured Assets?
FAQs - Assets

The term asset refers to anything of cash value that belongs to you, unfortunately sentimental value does not count. This includes, but is not limited to property, vehicles, furniture and basically anything that you would be able to sell or pawn at Cash Crusaders or a similar place. Assets are divided into two categories:

  1. Unsecured Assets, also known as Unencumbered Assets, and;
  2. Secured Assets, also known as Encumbered Assets.

Unsecured Assets

The term unsecured asset or unencumbered asset refers to anything of value that you might possess, that does not serve as security to one or more of your creditors, for the repayment of your debt. Assets that fall into this category include, but are not limited to:

  • Household furniture;
  • Tools;
  • Jewellery;
  • Firearms;
  • Vehicles (only once fully paid for);
  • Anything of value that you would be able to sell or pawn at Cash Crusaders or a similar place.

Take note that these assets must be debt free and must therefore be fully paid, in order to remain in this category.

Secured Assets

The term secured asset or encumbered asset refers to anything that serves as some form of security for the repayment of the debt due to one or more of your creditors. If you do not repay the debt to the specific creditor, he or she will remove the relevant asset from you in order to sell it themselves. You will then be held liable for any shortfall that might arise.

Secured assets are divided into the following 4 categories:

  1. Any assets subject to a bond, e.g. property like houses or flats;
  2. Assets purchased in terms of an Installment Sale Agreement, e.g. vehicles or furniture;
  3. Life Policy ceded to a creditor; or
  4. Anything of value that has been pawned at a pawn shop or Cash Crusaders or a similar place;

Take note that these assets acquired in terms of a Hire Purchase Agreement or a Lease Agreement will not fall into this category. The reason for this is that the ownership of assets, acquired in terms of these agreements, will vest in the bank from which the asset is “hired” or rented on a monthly basis.