Term
| Secured vs. Unsecured debt |
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Definition
| Secured debt is backed by collateral (equity). The creditor has rights within the collateral upon default of the debtor. If debt is unsecured the creditor has no rights in collateral, and is subject to any remnants that remain after secured creditors take their share; they are subordinate to secured creditors. |
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Term
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Definition
| Something (equity) pledged as security for repayment of a loan, to be forfeited to a secured creditor in the event of default. |
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Term
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Definition
| Assignment encompasses the transfer of rights held by one party – the assignor- to another party- the assignee. |
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Term
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Definition
| A secured transaction is where the creditor obtains an interest in property through a legal relationship (usually through contract). Security interest is the backup to the original obligation. |
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Term
| Purposes of bankruptcy law in accordance with the Standards Council of Canada |
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Definition
- To distribute equitably the assets of the debtor AND
- To rehabilitate the debtor as a citizen
- Scholars add: Prevention of fraud & abuse & protect the credit system.
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