Unsecured Creditor - Explained
What is an Unsecured Creditor?
Written by Jason Gordon
Updated at September 26th, 2021
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Table of Contents
What is an Unsecured Creditor?Secured and Unsecured Creditors in BankruptcyWhat are the types of Unsecured Creditor?Academic research for Unsecured CreditorWhat is an Unsecured Creditor?
Unsecured credit is a credit (loan or debt obligation) issued to a borrower without any form of collateral (such as personal assets or real property). So an unsecured creditor is a lender who has no legal claim to property of the debtor in the event the debtor fails to pay the debt owed. Unsecured loans also have higher interest rates than secured loans due to the higher risks involved.
Back To: COMMERCIAL LAW: CONTRACTS, PAYMENTS, SECURITY INTERESTS, & BANKRUPTCY
Secured and Unsecured Creditors in Bankruptcy
If a debtor files bankruptcy, secured creditors have a claim against the specific collateral of the debtor. As such, these creditor must have their debts paid in full, or the asset must be surrender to the creditor. Unsecured creditors have no ability to claim an interest in specific property of the debtor.
What are the types of Unsecured Creditor?
The common types of unsecured creditors are highlighted below;
- Credit card companies
- Landlords
- Student loans firms
- Personal loan firms
- Hospitals and doctors office
Related Topics
- What is a Security Interest?
- Collateral
- Pledge as Collateral
- Collateralize
- Cross Collateralization
- After-Acquired Collateral
-
Unsecured Loan Definition
- Unencumbered Asset
- What is a Secured Creditor?
- Unsecured Creditor
- What are the benefits of security interests for creditors?
- Limited Recourse Debt
- Uniform Commercial Code - Article 9
Academic Research for Unsecured Creditor
- The Unsecured Creditor--The Little Businessman--And the Uniform Commercial Code, Schnader, W. A. (1959). The Unsecured Creditor--The Little Businessman--And the Uniform Commercial Code. BC Indus. & Com. L. Rev., 1, 65.
- The Status of the Unsecured Creditor in the Modern Law of Secured Transactions, Raphael, J. S. (1960). The Status of the Unsecured Creditor in the Modern Law of Secured Transactions. BC Indus. & Com. L. Rev., 2, 303.
- The decline of unsecured creditor and shareholder recoveries in large public company bankruptcies, Wood, A. A. (2011). The decline of unsecured creditor and shareholder recoveries in large public company bankruptcies. Am. Bankr. LJ, 85, 429.
- The Plight of the General Unsecured Creditor Under the Uniform Commercial Code and Suggested Remedies, Levy, H. R. (1968). The Plight of the General Unsecured Creditor Under the Uniform Commercial Code and Suggested Remedies. Com. LJ, 73, 73.
- The Status Of The Unsecured Creditor In The Modern Law Of Secured Transactions, Raphael, J. S. (1963). The Status Of The Unsecured Creditor In The Modern Law Of Secured Transactions. Am. Bus. LJ, 1, 26.
- Unsecured Creditor versus Unregistered Charge, Lee, E. B. (1998). Unsecured Creditor versus Unregistered Charge. SAcLJ, 10, 241.
- When an Unsecured Creditor Is a Secured Creditor, Cuming, R. C. (2003). When an Unsecured Creditor Is a Secured Creditor. Sask. L. Rev., 66, 255.
- Imagine a Secured Creditor Being Beaten by an Unsecured One!, Bernhardt, R. (2012). Imagine a Secured Creditor Being Beaten by an Unsecured One!. Available at SSRN 2126765.
- Some Considerations regarding the Recovery of a Debt by the unsecured Creditor of an Heir, chiopu, S. D. (2016). Some Considerations regarding the Recovery of a Debt by the unsecured Creditor of an Heir. Bulletin of the Transilvania University of Braov, Series VII: Social Sciences and Law, 9(2), 183-188.
- Zero Times Something Is Still Zero: Adapting Till to Unsecured Creditor Claims, Gaudet, R. B., & Bury Jr, D. L. (2016). Zero Times Something Is Still Zero: Adapting Till to Unsecured Creditor Claims. American Bankruptcy Institute Journal, 35(1), 36.
