Secured creditor (BIA definition)

A lender or buyer meets this term when a business is failing and the question is who has a claim on which assets. The Office of the Superintendent of Bankruptcy describes a secured creditor as one who takes collateral for the extension of credit, and an unsecured creditor as one who gives credit but does not have any security for the debt owed.

Where the Act uses the label

• Section 71: on a bankruptcy order being made or an assignment being filed with an official receiver, the bankrupt’s property passes to the trustee, subject to the Act and to the rights of secured creditors.
• Section 136(1): subject to the rights of secured creditors, the proceeds realized from a bankrupt’s property are applied in the order of priority the section lists.
• Section 243(1): on application by a secured creditor, a court may appoint a receiver if it considers it just or convenient, subject to s. 243(1.1).

What to ask

Ask which creditors hold security, over which property, and for search results that confirm it. See what security registered against the assets a buyer takes subject to. This entry covers the federal definition only; how competing security ranks is a question for a lawyer, and priority of security interests is a starting point.