Trade creditors are usually grouped with “general unsecured creditors” in bankruptcy, but some have liens that can elevate their claim priority. To achieve this, the lien must be properly granted and perfected under applicable law, typically before the bankruptcy filing, and in a way that does not expose the lien to avoidance as a “preferential transfer.”

This article will discuss creditors lien rights, and the steps to ensure that the lien is and remains valid, perfected, and unavoidable, to avert costly disappointments during a bankruptcy case. To access this article and read other insights from our Creditor’s Rights Toolkit, please click here.