FOLIO Ontology

Undersecured Creditor

IRI:
https://folio.openlegalstandard.org/RDJ5gLF3diEDjeGSux0X4TJ
Preferred Label N/A
Alternative Labels
Inadequately Secured Creditor Insufficiently Secured Lender Partially Secured Creditor

Definition

An Undersecured Creditor is a lender whose collateral value securing a loan is less than the outstanding debt owed by the borrower. This situation often arises in bankruptcy contexts, affecting the creditor’s ability to fully recover the loan amount through collateral liquidation.

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