Unsecured Creditor
/ˌʌnˈsɪkjʊərd ˈkrɛdɪtər/
Definitions
- (n.) A creditor who extends credit without obtaining a security interest in the debtor’s property, thus having no priority claim on specific assets in bankruptcy.
Unsecured creditors often face higher risk as they are paid after secured creditors in insolvency.
Forms
- unsecured creditors
Related terms
See also
Commentary
Unsecured creditors lack collateral backing and thus have lower priority in debt recovery compared to secured creditors.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.