What is a secured creditor?
Sounds important, maybe scary, but remember –knowledge is power.
A secured creditor is a creditor with a valid mortgage or lien against the property of a debtor, such as a mortgage, home equity loan, or car loan. Property of the debtor that is encumbered by a valid mortgage or lien is called secured property. A secured creditor is usually permitted to repossess or foreclose the property, unless the value of the property greatly exceeds the amount owed to the creditor, but is required to use official court procedures in order to do so, including proving the validity of its mortgage or lien and obtaining a court order before repossessing or foreclosing on the property. The claim of a secured creditor is called a secured claim and must be collected from or enforced against the property, for example, from the proceeds of a sheriff’s sale of the property after a judgment of foreclosure has been obtained. However, the creditor then can obtain a judgment against the debtor for any deficiency from the sale proceeds, but the deficiency becomes an unsecured debt, and thus completely dischargeable in bankruptcy. The debtor should not turn over any property until a court order has been obtained. The debtor may be permitted to retain or redeem certain types of secured personal property.
Do you have a secured creditor that is trying to repossess or foreclose on real or personal property?