A secured creditor is a creditor which has the benefit of a security interest over some or all of the assets of the debtor.
In the event of the bankruptcy of the debtor, the secured creditor can enforce their security against the assets of the debtor, and avoid competing for a distribution on liquidation together with the unsecured creditors.
This means that should an assignment company fail to pay, the injured party can become the owner of the assets funding the payments. This ensures that the assets may not be used by other creditors to satisfy any claims.
