Legal Definitions - specialty debt

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:

• A bond issued by a corporation
• A lease agreement that requires the tenant to pay rent
• A mortgage that is secured by a property

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.