general creditor

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General Creditor

One who is owed an uncollateralized debt. A general creditor has no lien or collateral on the debt except perhaps a claim on unpaid-for goods, depending on the nature of the goods. In the event of bankruptcy in the United States, a general creditor has no automatic right to any part of the debtor's property, and must file a proof of claim in bankruptcy court. In a no-asset Chapter 7 bankruptcy, most debts are discharged to the detriment of the general creditor. In an asset Chapter 7 case, unsecured property is liquidated and distributed to general and other creditors according to the bankruptcy court's ruling. See also: Secured creditor.

general creditor

A lender with an uncollateralized loan, such as the owner of a debenture. In the event that a borrower goes bankrupt, its general creditors are likely to recover a smaller proportion of what is owed them than secured creditors will.
References in periodicals archive ?
general creditors value that they could not enjoy outside of bankruptcy.
The more convincing rationale is protection of the assignor's general creditors by ensuring that the bulk of the claims owing to an enterprise remains available to attaching creditors and to the assignor's insolvency administrator on behalf of the general creditors.
With a billion-dollar line of credit, this translates to a $50 million pool of assets for general creditors, who might otherwise have received nothing at all.
Giddens, trustee and chair of the Hughes Hubbard & Reed LLP corporate reorganization and bankruptcy group said, "The third multi-billion dollar distribution to general creditors is underway as winding down the estate moves ahead.
On the other side, the general creditors or other parties who do business exclusively with LuxuryOne may now have bankruptcy objections or strategic hold-up options that would not otherwise exist.
* The separate account's assets are insulated from the insurer's general creditors.
Although this overcollateralization will provide further protection to investors, the FDIC will be entitled to any unused excess for general creditors.
Investors should know that, above FDIC limits, they become general creditors of the issuing bank.
(154) To make up for this loss, a claimant harmed by these actions receives priority over other general creditors. (155)
Andronikou says Pompey's recent struggles have left them owing pounds 32m to former owner Sacha Gaydamak, pounds 13-15m to owner Balram Chainrai, pounds 15m to the Inland Revenue and pounds 6-7m to other general creditors.
It ensures that secured creditors are paid first, followed by general creditors, then shareholders, thereby encouraging creditors to continue lending to viable firms.

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