IVA Glossary
S
Secured Creditor
Secured creditor is a term that denotes a creditor who has special rights over his or her debtor's assets in case of the debtor's bankruptcy. These special rights of a secured creditor may refer either to some or to all of the assets of the debtor in question. Nevertheless, these rights refer in both cases to the event of insolvency. Practically, if one is a secured creditor, this means that in case of insolvency, this creditor will be paid first from the debtor's secured assets.
In its everyday meaning, the term "secured creditor" is often used to refer to all those creditors generally who have some kind of charge over a debtor's assets. There are two basic categories. The so-called "fixed charge holders" are paid first from the assets of the debtor, which means they get their money back prior to the so-called preferential creditors after all the expenses have been paid. On the other hand, the claims of the so-called "floating charge holders" will come only after that of the preferential creditors. Nevertheless, even floating charge holders come prior to ordinary creditors, but only if the debtor has enough security to cover their claims as well.
In its everyday meaning, the term "secured creditor" is often used to refer to all those creditors generally who have some kind of charge over a debtor's assets. There are two basic categories. The so-called "fixed charge holders" are paid first from the assets of the debtor, which means they get their money back prior to the so-called preferential creditors after all the expenses have been paid. On the other hand, the claims of the so-called "floating charge holders" will come only after that of the preferential creditors. Nevertheless, even floating charge holders come prior to ordinary creditors, but only if the debtor has enough security to cover their claims as well.
