What is the meaning of “secured creditor”?

A secured creditor is a creditor who holds a security interest in the property of a borrower. This means that the creditor has rights to the property of the borrower and can take possession of it in the event that the borrower fails to meet the terms of the loan agreement. In California, a secured creditor is defined under Civil Code Section 9202(a)(1) as a “creditor who has acquired an interest in specific property of the debtor by agreement or by transfer of the property to the creditor or another person for the benefit of the creditor.” Secured creditors are protected by creditors’ rights laws in California. This means that in the event that the borrower does not meet the terms of the loan agreement, the secured creditor can take possession of the property as described by the loan document. Creditors’ rights laws also provide for the secured creditor to receive payment from the proceeds of the collateral if the sale of the collateral is insufficient to satisfy the outstanding amount owed. In order to secure their rights as a creditor, secured creditors must take the necessary steps to perfect their security lien. In California, this process involves filing certain documents with the county recorder’s office and/or the California Secretary of State. By perfecting the security lien, the secured creditor will be given priority in obtaining payment in the event of a default.

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What is the meaning of “secured creditor”?

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