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| Insolvency |
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Asecured creditor is acreditor with the benefit of asecurity interest over some or all of the assets of thedebtor.
In the event of thebankruptcy of the debtor, the secured creditor can enforce security against the assets of the debtor and avoid competing for a distribution on liquidation with theunsecured creditors.
In most legal systems, secured creditors also have the option of releasing their security and proving in theliquidation, although, in practice, they would rarely do so.
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