In this video, Richard Killen, a Toronto-based Licensed Insolvency Trustee talks about, What Are The Different Types Of Creditors.
In a Trustees world, there are three types of creditors, there are secured creditors, unsecured creditors, and contingent creditors. Contingent creditors are if you have co-signed for someone for instance. You may never be asked to pay that thing because the other person is going to do all the paying. But, who knows. The ones we regularly have to deal with, the ones that matter, are secured and unsecured creditors. The vast majority of the ones that we deal with are the unsecured creditors. The unsecured creditors are the ones who don’t have any particular rights in terms of being able to effect repayment of their debt. They have to go through the courts, get judgments and things like that. A secured creditor is a person who has a contract, you have given that person a contract, that specifically designates that they have a right to come and take a particular thing away from you if you don’t pay them. So, a typical one is a mortgage. If you give a mortgage to the bank because they leaned your money to buy a house, then if you don’t make the payments on that loan, that mortgage allows them to come and repossess the house. Same thing with a car loan and things like that. So a secured creditor is essentially a person who doesn’t have a lot to do with a bankruptcy or proposal. They are kind of outside the bankruptcy and proposal.
If you are uneasy about bankruptcy you should definitely visit a licensed insolvency trustee so that you will be given an advice about your bankruptcy problems.