A creditor is someone that people owe money to. If you are owed money by a person or an organization and aren’t getting paid, it can put you in a position where legal actions can be taken to get the money that is rightfully yours. If you are owed money by a person, creditors can can check public registers to see if that individual is bankrupt. If the money is owed by a company, there are steps that you can take to see if the company is in liquidation. When it comes to creditors, there are secured and unsecured creditors. There are distinct differences between the two. Principle Insolvency is here to talk about these differences.
Secured Creditor
If you are a secured creditor, you will have the right to the person’s assets if you aren’t receiving payments. This could include those that are getting paid for a mortgage on a house or a loan for a car. The house or the car could be sold to pay off the debt. After these assets are sold, you have a right to the money to make up the difference but will do so as an unsecured creditor.
– Bankruptcy/NAP Secured Creditors: When you are trying to get money owed to you, but the individual is bankrupt, you can carry on with your payment agreement. However, if they fall behind in paying you back, you then can exercise your right to repossess.
– Liquidation Secured Creditors: It is different when a company owes you money and goes into liquidation. You won’t be able to continue with your agreement and will have to sell secured assets or value secured assets and claim as an unsecured creditor for the expected shortfall.
Unsecured Creditor
When it come to an unsecured creditor, this is a person who doesn’t have any right to repossess assets and sell them. If you are an unsecured creditor, it is important that you file a claim in the bankruptcy or liquidation estate so whoever the Official Assignee assigned to the case knows that you are a creditor. This is done by filing an electronic claim, but you will need to have evidence to support your claim. Some unsecured creditors decide to pursue the debtor for the money that they are owed. Sometimes, there are also agreements that are drawn up to pay back unsecured creditors over a certain period of time until the money they are owed is taken care of.
Insolvency Services in Auckland, Hamilton, Levin & New Zealand Wide
Anyone that is in a position where they are facing bankruptcy or liquidation can turn to Principle Insolvency for the help that they need. Our team of highly trained professionals will help you better understand the options that you have in front of you to help you move forward. We will help you decide which option is going to benefit you the most. We want you to know exactly what you’re up against. Call us today!