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Secured Creditors are creditors that hold a lien on its debtor's property, whether that property is real property or personal property. The lien gives the secured creditor an interest in its debtor's property that provides for the property to be sold to satisfy the debt in cases of default.
Common examples of secured bankruptcy claims include: mortgages. car loans. unpaid real estate taxes, and. other property liens.
Some creditors hold a secured claim (for example, the bank that holds the mortgage on your house or the loan company that has a lien on your car).
Related Content. A creditor holding a secured claim, or a perfected lien, on a debtor's property. In bankruptcy, a secured creditor has the right to be paid before any other creditors out of the proceeds of its collateral.
A creditor with an unsecured claim has a promise to pay from the borrower but doesn't have a lien. There are two types of unsecured claims: Priority unsecured claims. These debts aren't dischargeable in bankruptcy, and, if money is available, the claim will get paid before nonpriority unsecured claims.
Priority Unsecured Debts Examples of bankruptcy priority claims include most taxes, alimony, child support, restitution, and administrative claims. In a Chapter 7 asset case, priority claims receive payment in full before any payments to general unsecured creditors. Priority debts are nondischargeable.