What is a secured party creditor?
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What is a secured party creditor?
Asked on October 10, 2012 under Bankruptcy Law, Texas
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
A secured party creditor is someone who holds what is known as a "security interest" in property of a debtor. A security interest is a legal term that describes the right a secured party to the property or the proceeds of the property subject to the security interest, in case the debtor fails to pay or perfom their obligations to the secured party.
An example of a secured creditor would be if you purchased a car with a car loan; there would be a note and security agreement. The car would be the lender's security for the note, as provided for in the agreement. Therefore the bank woud be the secured creditor. If you file bankruptcy, you have to list the lender holding the car note as a secured creditor.
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