• Secured creditors receive special consideration in a Chapter 13 bankruptcy.debt defined image by Christopher Walker from Fotolia.com
  
  A secured creditor has special privileges and rights in a Chapter 13 bankruptcy case. Secured creditors are those creditors who are owed debts that are backed by collateral property, or property the creditor can seize to enforce a claim. These types of creditors generally have a prominent role in Chapter 13 proceedings and can affect the outcome for the debtor.
  
  

Claim Priority

• Secured creditors have a higher status in Chapter 13 bankruptcy filing than a creditor with unsecured debt, or debt that is not attached to any collateral property. This means the secured debts, typically a mortgage or auto loan, are given priority when the Chapter 13 plan for repayment is made by the debtor. In some cases, within 30 days after filing a Chapter 13 petition, the debtor must make the payments stipulated in the proposed repayment plan to all holders of secured claims until the plan is confirmed in court.
  
  

Repayment Plan

• All Chapter 13 debtors must design an installment repayment plan to settle the debts listed in the bankruptcy within three to five years. The plan consists of the amounts that each creditor will receive out of the total monthly payment made by the debtor to the bankruptcy court. Secured creditors are given special consideration when determining what portion of the secured debt will be repaid under the plan. A secured creditor may be eligible to receive the full-market value of the property, even if depreciation has occurred. Although the secured creditors cannot use debt enforcement methods while this plan is in effect, timely payments are still required.
  
  

Creditors Meeting

• All creditors are allowed to attend a meeting with the debtor that is conducted by the court trustee. Each creditor can participate in the meeting and ask the debtor questions about his financial matters. Secured creditors are typically given a more prominent voice in this procedure. These creditors can also use the information from the meeting to object to such claim-related matters as the value assigned to the secured asset.
  
  

Secured Creditors Relief

• Secured creditors can file for relief from the automatic stay, or protection the debtor received from creditors at the time of filing the bankruptcy petition, if the debtor has little or no equity in the property in order for the creditor to pursue collection methods to recover the asset. These types of creditors can also obtain relief from a stay for insurance coverage costs if the debtor is not maintaining insurance on the property. If payments are not made on a regular basis, as specified in the repayment plan, creditors have the right to take back the collateral property. Auto loan creditors, for example, may repossess the vehicle and mortgage lenders can start or finish a foreclosure proceeding.
  
  

Surrender of Property

• Debtors can surrender property to secured creditors. Any difference between the property value and secured claim amount becomes unsecured debt in the bankruptcy, but the creditor can sell the asset to recover part or all of the original claim.