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| Collections Debtor-creditor law governs situations where one party is unable to pay a monetary debt to another. There are three types of creditors. First are those who have a lien have a charge against a particular piece of property. This property (or proceeds from its sale) must be used to satisfy the debt to the lien-creditor before it can be used to satisfy debts to other creditors. A lien may arise through statute, agreement between the parties, or judicial proceedings. Secondly, a Creditor may have a priority interest. A priority arises through statutory law. If a creditor has a priority his debt must be paid when the debtor becomes insolvent before other debts. The final type of creditor is one who has neither a lien against the debtor’s property or is the subject of a statutory priority. |
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