Simple English definitions for legal terms
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Specialty debt is a type of debt that is due, or acknowledged to be due, by an instrument under seal, such as a deed of covenant or sale, a lease reserving rent, or a bond. This means that the debt is backed by a legal document that has been signed and sealed by both parties.
Examples of specialty debt include:
These examples illustrate how specialty debt is different from other types of debt, such as simple-contract debt, which is not backed by a legal document. Specialty debt is considered more secure because it is backed by a legal agreement that can be enforced in court if necessary.