What is a secured creditor?

A secured creditor is a creditor who has rights to a debtor’s assets in the event of a default on a loan or other financial obligation. In North Carolina, if a debtor fails to make payments or otherwise defaults on a loan, the secured creditor has the right to take possession of the asset or property used to secure the loan. This is called a lien, and it serves to provide the creditor with a secure financial interest in the asset or property. It gives the creditor the right to receive payment from the debtor prior to other creditors in the event of a default on the loan or other obligation. Generally speaking, this applies to assets such as a house, a car, or other such property.

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