1) Why is having \"priority\" so important to a secured party? 2) In the event t
ID: 2481213 • Letter: 1
Question
1) Why is having "priority" so important to a secured party?
2) In the event that a debtor files for bankruptcy after entering into a secured transaction who would have priority as to the collateral...the US Bankruptcy Court (who will sell the asset for the benefit of all the creditors) or the secured party (who will repossess the collateral for his or her own benefit)?
Thanks!
1) Why is having "priority" so important to a secured party?
2) In the event that a debtor files for bankruptcy after entering into a secured transaction who would have priority as to the collateral...the US Bankruptcy Court (who will sell the asset for the benefit of all the creditors) or the secured party (who will repossess the collateral for his or her own benefit)?
Thanks!
Explanation / Answer
(1) The "priority" is important to a secured party because it would help to achieve the targets in the economy. THe market would be in equilbrium.
(2) When a debetor files a bankruptcy after entering into a secured transaction which would give priority as to the collateral it shows lack of money in the bank. It also shows less monetary value to the firm in the market.
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