An unsecured creditor is a creditor other than a preferential creditor that does not have the benefit of any security interests in the assets of the debtor.[1]
In the event of the bankruptcy of the debtor, the unsecured creditors usually obtain a pari passu distribution out of the assets of the insolvent company on a liquidation in accordance with the size of their debt after the secured creditors have enforced their security and the preferential creditors have exhausted their claims.
Although in a liquidation the unsecured creditors will usually realize the smallest proportion of their claims, in some legal systems, unsecured creditors who are also indebted to the insolvent debtor can (and in some jurisdictions, must) set off the debts, putting the unsecured creditor with a matured liability to the debtor in a pre-preferential position.
^"Definition: unsecured creditor". Investopedia. Retrieved 29 June 2015.
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An unsecuredcreditor is a creditor other than a preferential creditor that does not have the benefit of any security interests in the assets of the debtor...
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property represents the security. An unsecuredcreditor does not have a charge over the debtor's assets. The term creditor is frequently used in the financial...
secured creditor can enforce security against the assets of the debtor and avoid competing for a distribution on liquidation with the unsecuredcreditors. In...
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unsecuredcreditors. Some legal systems operate a hybrid approach; in the United Kingdom preferential creditors have priority over secured creditors whose...
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other unsecuredcreditors. Security interests have to be publicly registered, on the theory that transparency will assist commercial creditors in understanding...
lien Seniority Pari passu Senior debt Subordinated debt Secured creditorUnsecuredcreditor Trevor Sykes, The Bold Riders, second edition, 1996, ISBN 1-86448-184-6...
exercise of those powers to try to mitigate potential prejudice to unsecuredcreditors. Typically, an administrative receiver is an accountant with considerable...
entry. Liquidation may either be compulsory (sometimes referred to as a creditors' liquidation or receivership following bankruptcy, which may result in...
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restructuring reduces financial losses, simultaneously reducing tensions between creditors and equity holders, in order to facilitate a prompt resolution of a distressed...
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