Creditors who hold security for payment, such as a lien or a mortgage on the debtor's property, are less affected by the debtor's bankruptcy.

Question

Quizplus · Accepted Answer

Creditors who hold security for payment, such as a lien or a mortgage on the debtor's property, have a higher chance of getting paid back during the bankruptcy process. This is because they have a legally recognized claim on specific assets of the debtor, which they can enforce through foreclosure or repossession if the debtor defaults on the debt. As a result, secured creditors are generally considered to be in a better position compared to unsecured creditors when it comes to bankruptcy proceedings.

Creditors Who Hold Security for Payment, Such as a Lien