Secured Creditor

A secured creditor is a creditor who holds security over the debtor's property (such as a mortgage, fixed charge, or floating charge) to secure repayment of a debt. In insolvency, secured creditors have priority over unsecured and preferential creditors to the extent of their security. If the secured asset is worth more than the debt, the surplus is available to other creditors.

In practice

A secured creditor may enforce their security outside the insolvency process (subject to the administration moratorium) or prove for the deficiency as an unsecured creditor. The security must be properly created and registered to be enforceable: failure to register a charge at Companies House within 21 days renders it void against a liquidator or other creditors. Secured creditors do not need to submit a proof of debt unless they wish to claim for any shortfall.