What is a “secured debt?” and who is a secured creditor?
Usually, a debt is secured and hence the lender has a “security interest” and is a “secured creditor” if the creditor lent you all or part of the purchase price of the asset and reserved a “security interest” in it. The latter is referred to as a “purchase money security interest” and a creditor who has one is highly favored among creditors in a bankruptcy proceeding. There are other types of security interest but, for the sake of brevity, only the most common is discussed here. A purchase money security interest gives the seller/lender the right to repossess the asset if you fail to make the required payment. A secured debt is most commonly a home mortgage or a car loan, but might be any asset against which money may be borrowed. Whether you have filed a Chapter 7 or a Chapter 13, if you wish to keep property that you financed to purchase, you must continue to make the current payments (as distinguished from arrears) on any such debts. If you fail to make payments as they come due on
Related Questions
- The debtor intends to surrender the collateral for a secured debt, but the creditor still appears in Subpart C of the B22 form. How do I remove the creditor from Subpart C?
- What is the difference between a fully secured creditor and an undersecured creditor?
- What is a "secured debt?" and who is a secured creditor?
