WHAT IS THE DIFFERENCE BETWEEN A “SECURED” CREDITOR AND AN “UNSECURED” CREDITOR?
– A secured creditor is a creditor whose claim against the debtor is secured by a valid mortgage, lien, or other security interest against property that is owned by the debtor. An unsecured creditor is a creditor whose claim against the debtor is not secured by a valid mortgage, lien or security interest against the debtors property. In other words, a secured creditor has collateral for its claim and an unsecured creditor does not. The basic difference is that a secured creditor may collect all or a portion of its claim from its collateral, while an unsecured creditor may not. It is common for the amount of a secured creditors claim to exceed the value of its collateral. This type of creditor is called a partially-secured (or under secured) creditor. In chapter 13 cases the claims of most partially-secured creditors are divided into secured and unsecured portions.
A. Generally speaking, a Secured Creditor is a creditor that has not only your promise to pay, but has a lien in the property that you possess. An Unsecured Creditor only has your “naked” promise to pay – if you are unable to make payment, the unsecured creditor does not possess a lien and therefore does not have the ability to seek possession of any specific asset, without court assistance.
A secured creditor is a creditor whose claim against the debtor is secured by a valid mortgage, lien, or other security interest against property that is owned by the debtor. An unsecured creditor is a creditor whose claim against the debtor is not secured by a valid mortgage, lien or security interest against the debtor’s property. In other words, a secured creditor has collateral for its claim and an unsecured creditor does not. The basic difference is that a secured creditor may collect all or a portion of its claim from its collateral, while an unsecured creditor may not. It is common for the amount of a secured creditor’s claim to exceed the value of its collateral. This type of creditor is called a partially-secured (or undersecured) creditor. In Chapter 13 cases the claims of most partially-secured creditors are divided into secured and unsecured portions. For example, a partially-secured creditor with a $2,000 claim against the debtor that is secured by collateral that is worth
A secured creditor is a creditor whose claim against the debtor is secured by a valid mortgage, lien, or other security interest against property that is owned by the debtor. An unsecured creditor is a creditor whose claim against the debtor is not secured by a valid mortgage, lien or security interest against the debtor’s property. In other words, a secured creditor has collateral for its claim and an unsecured creditor does not. The basic difference is that a secured creditor may collect all or a portion of its claim from its collateral, while an unsecured creditor may not. It is common for the amount of a secured creditor’s claim to exceed the value of its collateral. This type of creditor is called a partially-secured (or under-secured) creditor. In chapter 13 cases the claims of most partially-secured creditors are divided into secured and unsecured portions. For example, a partially-secured creditor with a $2,000 claim against the debtor that is secured by collateral that is wort
