Identify the various types of creditors as they are labeled during a bankruptcy?

Expert Solution

Explanation:

Secured creditors is that secured debts are not included in your bankruptcy proceedings. The Bankruptcy & Insolvency Act only pertains to unsecured debts.Because Secured creditors will have the right against the assets.

Only Unsecured Creditors are Labeled in bankruptcy code. They are of 3 types:

preferred
deferred
ordinary

A Preferred creditor is one that has a claim or a partial claim that is entitled to receive a dividend before any of the other unsecured creditors.

Deferred creditors are persons or companies that are not entitled to receive any money from a trustee administering a personal bankruptcy or consumer proposal until all of the other creditors have been paid in full.

If a debt does not fall into the deferred or preferred subclasses then it is deemed to be an ordinary unsecured creditor.

ekkarill92 answered 2 years ago

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