Property pledged as security for the satisfaction of a debt. Collateral may also refer to property that has become subject to the lien of one or more creditors through judicial process. Such creditors are often referred to as secured creditors (SA-Bankruptcy.com)The property which is subject to a lien. A creditor with rights in collateral is a secured creditor and has additional protections in the Bankruptcy Code for the claim secured by collateral. The measure of the secured claim is the value of the collateral available to secure the claim: it is possible to have a lien on property that is subject to a senior lien or liens such that the security available to pay the claim is really without value to the junior creditor. The general rule with respect to liens is "First in time, first in right."Property pledged to secure the payment of a debt.When a borrower grants a lender a lien on the borrower's inventory (to secure repayment of the loan), the inventory is the collateral for the loan. (Bernstein's Dictionary of Bankruptcy Terminology)Property that has been given or committed in order to guarantee a loan. (Dictionary of Canadian Bankruptcy Terms)
United Glossary of Bankruptcy Terms 2012.
Property pledged to secure the payment of a debt.
When a borrower grants a lender a lien on the borrower's inventory (to secure repayment of the loan), the inventory is the collateral for the loan.
US Bankruptcy 2012.
Glossary of Bankruptcy.