What Is a Secured Creditor?

A secured creditor is a right holder who has a security right in a bankrupt's specific property and has the priority to receive compensation for that specific property.

Secured creditor

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A secured creditor is a right holder who has a security right in a bankrupt's specific property and has the priority to receive compensation for that specific property.

Chinese name

Secured creditor

Foreign name

Secured creditors'

According to

"Bankruptcy Law"

Meaning

The right to priority compensation for that particular property

Article 109 of the Bankruptcy Law provides:

Article 110 provides that: if a creditor who enjoys the rights provided for in Article 109 of this law fails to be fully paid in exercising the right of priority payment, his unpaid creditor's right shall be regarded as an ordinary claim; Its claims are treated as ordinary claims. The above provisions stipulate that secured creditors have the priority to receive compensation. At the same time, the "Bankruptcy Law" stipulates that creditors should report their claims to the administrator within the time limit for reporting claims set by the people's court. And submit relevant evidence. However, the law does not clearly stipulate the consequences of a secured creditor's failure to declare a claim within the time limit for claim declaration set by the people's court. Although Article 56 of the Law stipulates that, within the time limit for the declaration of creditor's rights as determined by the people's court, if the creditor fails to declare the creditor's right, he may make a supplementary declaration before the final distribution of the bankruptcy property; Distribution ... Creditors who have not declared their claims in accordance with the provisions of this Law shall not exercise their rights in accordance with the procedures provided in this Law. Some have argued that this article contains provisions for the consequences of failure to declare creditors with property guarantees within a specified period. I think that secured claims are different from ordinary claims, after all, there is a stronger formality in the establishment of secured claims, and it should not be unilateral procedural "inaction"-failing to meet the deadline for the declaration of claims by the people's court Declaring a creditor's right negates the creditor's claim and its attributes. The bankruptcy administrator can fully determine the number of creditors and creditor's rights of the bankruptcy enterprise based on the financial books, transaction contracts, and other materials of the bankruptcy enterprise. After checking the creditors who declare, they should also report to the undeclared specific creditors, especially secured creditors. A reminder notice was issued, and if it still failed to declare its claims in a timely manner, it was then dealt with in accordance with the provisions of Article 56 of the Bankruptcy Law. Only in this way could it guarantee both the interests of creditors and the efficiency of the bankruptcy proceedings. Imagine that the people's court should not procedurally cancel the tax authority's right to recover the tax owed by the bankrupt because the state tax collection and management authority failed to declare its claims within a specified period. After all, the purpose of bankruptcy claims is not to set up obstacles for creditors to realize their claims, but to realize creditors' claims as much as possible.