Secured Creditor
A creditor whose debt is backed by a security interest over the debtor's property, giving it priority over unsecured creditors for that asset.
What security provides
A secured creditor is a creditor that holds a security interest over some or all of a debtor's property, such as a charge, mortgage or registered security. If the debtor cannot pay, the secured creditor can generally look to the secured asset to recover what it is owed. This puts secured creditors in a stronger position than unsecured creditors when it comes to that particular property.
In an insolvency
When a company or individual becomes insolvent, secured creditors usually rank ahead of unsecured creditors in relation to their security, and may appoint a receiver or enforce their security to realise the asset. This is general information only and not legal or financial advice. The contrasting position is set out at unsecured creditor.
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