Meaning & use
unsecured creditors
Last updated
Meanings
nounpluralfinance
People or companies owed money who have no claim on a specific asset of the debtor to guarantee they will be repaid.
Grammar: Plural form; the singular is an unsecured creditor.
Patterns
- unsecured creditors of a company
Unsecured creditors often receive only a small share when a firm goes bankrupt.
The supplier became one of the unsecured creditors after the shop closed.
Banks with loans backed by property rank ahead of unsecured creditors.
nounplurallegal
In a bankruptcy or insolvency process, the group that is paid after secured lenders and certain other debts.
Grammar: Often discussed as a group in court reports.
The administrator told unsecured creditors to expect a payment of a few cents on the dollar.
A meeting of unsecured creditors approved the rescue plan.
Common combinations
- pay unsecured creditors
- The company hopes to pay unsecured creditors in full.
- rank behind secured lenders
- Unsecured creditors rank behind secured lenders.
- meeting of unsecured creditors
- A meeting of unsecured creditors was held on Monday.
- owed to unsecured creditors
- Millions were owed to unsecured creditors.
- small unsecured creditors
- Small unsecured creditors lost the most.
Synonyms and how they differ
- general creditors
- This is a close phrase used in some legal systems and means the same type of creditor, but it is less common in everyday news.
- trade creditors
- This is narrower: it means suppliers owed for goods or services, who are usually unsecured.
- lenders
- This is general and includes banks with security, so it does not show lower rank in repayment.
Opposites
Word family
Commonly confused: unsecured creditors or unsecured loan? unsecured creditors or debtors?
unsecured creditors vs unsecured loan
An unsecured loan is the debt itself, while unsecured creditors are the people or firms owed it.
unsecured creditors vs debtors
Debtors owe the money, while creditors are owed it.
Practice
When the airline collapsed, the ___ were told they would probably receive only a fraction of what they were owed.
Choose one answer.
Unsecured creditors have no asset guaranteeing repayment, so they are often paid only in part. Secured lenders are repaid first, and debtors are the ones who owe money.
Make it your own
Write a sentence using “unsecured creditors”, then check it and compare it with the examples above.