Secured vs Unsecured Creditors
– By Priya Jestin, Staff Writer
When you are indebted to someone, it is good to know the kind of creditors you have. Generally speaking there are two broad categories of creditors: Secured and unsecured. A �secured creditor� has a lien, or interest on your property, which s/he can use to satisfy the debt. Now within this category, you will find voluntary liens like mortgage or security interest in a car. Then there are involuntary liens on property that result from unpaid taxes or a judgment.
An unsecured creditor on the other hand, has no interest in any particular property of the debtor. So, apart from a bankruptcy, the only way unsecured creditors can get their money back is if you, the debtor pays up voluntarily. If you decide not to pay up, your creditors will have to sue you, get a judgment against you, and ask the sheriff to seize some of your property and sell it to satisfy their claims.
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