Effects on Creditors

Effect of Bankruptcy on Creditors

Learn the effects of bankruptcy on creditors

Secured creditors retain their right to exercise securities over assets; however any shortfalls which may arise as a result from securities not satisfying the full debts, the creditor may then file a POD (proof of debt) to give them an opportunity to receive a dividend in the liquidation in place of the shortfall.

All unsecured creditors will exchange their right to pursue arrears for their appropriate and proportionate dividend in the liquidation. They cannot pursue any shortfalls in which their dividend fails to satisfy balance of arrears.

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