The determination of the status of a creditor has a material impact both inside bankruptcy and outside bankruptcy.
A secured creditor is a creditor who has obtained a lien on real or personal property either with the consent of the debtor, such as a home mortgage, or involuntarily, such as a tax lien. Debts of this type include car loans, home loans, tax liens and mechanics & materialmans liens.
A secured creditor has a priority on collection of its debt on the specific property on which it has a lien.
An unsecured creditor is a creditor who does not have a lien to secure repayment of its indebtedness. Debts of this type include medical bills, credit cards, cash advance or pay day loans.