What are the disadvantages of being an unsecured creditor in bankruptcy?
Jan Meriss Alfonso Assistant at Ascent Law LLC Disadvantages of Being an Unsecured Creditor in Bankruptcy Unsecured creditors face a number of disadvantages when dealing with bankruptcy. These disadvantages include the potential loss of business assets and employment opportunities, as well as non-dischargeable debts. To learn more, read the following article. Disadvantages of being an unsecured creditor in a bankruptcy Being an unsecured creditor in bankruptcy can have its disadvantages. One disadvantage is that you don't hold a lien on your debtor's property. A secured creditor, on the other hand, has priority over unsecured creditors when it comes to collecting debt. This means that you'll have to file a lawsuit to collect your debt if your debtor doesn't pay you. An unsecured creditor in bankruptcy is not entitled to distributions. In most cases, unsecured creditors do not receive any kind of notice unless they are scheduled creditors. Those creditors will be notif...