When the value of the security is not great enough to cover the debt, a secured creditor is an unsecured creditor for that outstanding amount.

Name: When the value of the security is not great enough to cover the debt, a secured creditor is an unsecured creditor for that outstanding amount.
Brand: Quizplus
Rating: 4.8 (36 reviews)

Question

Quizplus · Accepted Answer

When the value of the security is insufficient to cover the debt, the secured creditor becomes an unsecured creditor for the remaining balance, as they no longer have collateral to cover that portion of the debt.

When the Value of the Security Is Not Great Enough