Are There Different Types Of Creditors?
There are creditors who have a lien against a piece of property. The property or proceeds from its sale must be used to satisfy the debt to the creditor holding the lien before it can be used to satisfy debts to other creditors. A lien may arise from agreement between then parties or as a result of court proceedings. There are creditors who have a priority interest established by statute. For example, debts owed to the Federal Government have a priority interest and must be paid before other debts. Finally, there are creditors who do not have a lien against the debtor’s property, nor do they have a priority interest.
