Who Are Creditors?
Creditors are the people or companies that you owe. There are three types or classifications of creditors.
Secured – A creditor is a secured creditor if property has been pledged as collateral, for example a house or car, and the creditor has perfected a lien against the property. A creditor may also be a secured creditor by operation of law, such as a real property tax creditor. A secured creditor can take your property if you don’t pay them.
Unsecured Priority – An unsecured priority creditor does not have a lien against property but must be paid in full. Examples of this type of creditor are certain income tax debts, your attorney’s fee and alimony and child support.
Unsecured – Unsecured creditors do not have a lien against property and are generally not legally required to be paid in full. Examples include signature loans, medical expenses and most credit card debt. Student loan debt is also unsecured but is not dischargeable in a bankruptcy case.