Ken loaned Barbara $8,000 and took in return a note secured by Barbara's car.If Barbara files for bankruptcy when the value of the car is $4,500, what is Ken's status? He has a (n):

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Ken has a secured claim for $4,500 because his loan was secured by Barbara's car which has a current value of $4,500. In the event of Barbara's bankruptcy, Ken has the right to take possession of the car and sell it to recover the $4,500 owed to him. The remaining $3,500 of the loan would be treated as an unsecured claim.

Ken Loaned Barbara $8,000 and Took in Return a Note