Abstract
Abstract It is important to distinguish between debts which are secured and those which are not. A secured creditor will be able to resort to the property over which he or she has a charge to recover the amount due to him or her and will thus also gain priority over unsecured creditors in bankruptcy. If the proceeds of sale of the mortgaged property are insufficient to discharge the debt, then the mortgagee may prove for the shortfall as a general creditor. If there is a surplus then this must be paid to the debtor’s trustee in bankruptcy for the benefit of his or her general creditors. The problems which may arise in relation to the validity of mortgages are considered in Chapter 3 and the remedies available to a mortgagee whose mortgage is valid are considered in Chapter 4. The remedies available to unsecured creditors are considered later in this chapter and an unsecured creditor may become a secured creditor by obtaining a charging order in respect of specific property of the debtor.
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