Unsecured Creditors

Glossary

Banking

Unsecured Creditors

An unsecured creditor is one that has no security over a borrower’s assets. In an insolvency situation, senior unsecured bondholders, for example, stand behind secured creditors and preferential creditors (which can include employees’ claims for unpaid but earned salaries) in the queue for repayment but in front of subordinated and equity holders.

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