Unsecured creditors have equal priority and stand behind secured creditors for repayment of their debts.

Name: Unsecured creditors have equal priority and stand behind secured creditors for repayment of their debts.
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Question

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Unsecured creditors do not have a claim to any specific asset of the debtor, unlike secured creditors who have a claim to the collateral backing their loan. Therefore, in the event of a bankruptcy or liquidation, unsecured creditors are paid after secured creditors have been satisfied.

Unsecured Creditors Have Equal Priority and Stand Behind Secured Creditors