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In a secured claim contract, if the debtor defaults, or is unable to payback the debt, the creditor can take ownership of the collateral and sell it to pay off what the debtor owes. For example, if a consumer defaults on a mortgage, the bank can claim the house and sell it to pay off the consumer's debt.
A secured claim is a financial obligation for which there is collateral to guarantee the payment of a debt. The collateral can be most any type of property, such as real estate, business inventory and personal goods. With most secured claims, the debtor voluntarily pledges an interest in property to the creditor.
An unsecured claim is a liability for which there is no collateral. Instead, credit was extended solely based on the creditor's evaluation of the debtor's ability to pay.
A secured debt is a debt that is secured by property. If you don't repay the debt ing to your contract?for example, you fail to make your monthly payment?the creditor has the right to take back the secured property, such as your home or car. In contrast, your unsecured creditors don't have the same rights.
Secured debt - A debt that is backed by real or personal property is a ?secured? debt. A creditor whose debt is ?secured? has a legal right to take the property as full or partial satisfaction of the debt.
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.
A secured claim is a financial obligation for which there is collateral to guarantee the payment of a debt. The collateral can be most any type of property, such as real estate, business inventory and personal goods. With most secured claims, the debtor voluntarily pledges an interest in property to the creditor.