secured creditor

A person who holds some security, such as a mortgage, for money he has lent. If the debtor becomes bankrupt the creditor has a choice. He may surrender his security and claim the amount of the debt from the bankrupt’s assets, like any other creditor; he may realize or evaluate the security and claim any balance of the debt in excess of the value of the security; or he may rely on the security and not make any claim in the bankruptcy proceedings. Compare *unsecured creditor.