Meaning & use
unsecured creditor
Last updated
Meaning
nouncountablefinancelegal
A person or company owed money that is not backed by a specific asset.
Grammar: Countable noun; plural is 'unsecured creditors'. Often used in legal and financial contexts.
Patterns
- an unsecured creditor of someone
- repay unsecured creditors
- a group of unsecured creditors
In the bankruptcy case, unsecured creditors received only a small portion of what they were owed.
The bank was an unsecured creditor because the loan had no collateral.
Unsecured creditors often rank behind secured creditors when a company is liquidated.
Word forms
| plural | unsecured creditors |
|---|
Common combinations
- unsecured creditor claims
- The court reviewed the unsecured creditor claims.
- a committee of unsecured creditors
- A committee of unsecured creditors was formed to represent their interests.
- pay unsecured creditors
- The company struggled to pay unsecured creditors after the collapse.
- unsecured creditor debt
- Unsecured creditor debt is often discharged in bankruptcy.
Synonyms and how they differ
- general creditor
- A general creditor is similar but may include those with no priority; unsecured creditor is more specific in bankruptcy law.
Opposites
Word family
- unsecured adjective
- Not protected by a guarantee or asset.
- creditor noun
- A person or company that is owed money.
Commonly confused: unsecured creditor or secured creditor?
unsecured creditor vs secured creditor
A secured creditor has a legal right to take a specific asset if the debt is not paid, while an unsecured creditor does not.
Practice
Which creditor is most likely to be paid first in a bankruptcy?
Choose one answer.
Secured creditors have a claim on specific assets, so they are usually paid before unsecured creditors. Unsecured creditors have no such security.
Make it your own
Write a sentence using “unsecured creditor”, then check it and compare it with the examples above.