One of two general types of creditors of a company or individual. Secured creditors have a lien on property of the company or individual.
A secured creditor is a creditor with the benefit of a security interest over some or all of the assets of the debtor.
In the event of the bankruptcy of the debtor, the secured creditor can enforce security against the assets of the debtor and avoid competing for a distribution on liquidation with the unsecured creditors.
In most legal systems, secured creditors also have the option of releasing their security and proving in the liquidation, although, in practice, they would rarely do so. Any creditor with a lien on all or a portion of an asset, such as a mortgage on real estate or a bank loan, is said to be a secured creditor.
