Secured creditor (zajištěný věřitel)
A creditor whose claim is secured by the debtor's assets; with a mortgage, by a lien on the property registered in the land registry (§ 2(g) of Act No. 182/2006 Coll., the Insolvency Act). In insolvency and enforcement it is satisfied first from the proceeds of realising the collateral, after deduction of the costs of realisation. Among several lien creditors, the order in which the liens were registered decides.
Example
A flat pledged for a mortgage with CZK 3,543,000 outstanding (originally CZK 4,000,000 at 5.00 %) is sold in insolvency for CZK 4,800,000. The bank as a secured creditor receives its full claim from the proceeds after costs and the administrator's fee. The remainder goes into the insolvency estate, from which unsecured creditors are satisfied pro rata.
In practice
A secured creditor has a strong say in insolvency and can instruct the insolvency administrator to realise the collateral. If the proceeds do not cover the whole debt, the rest is satisfied as an unsecured claim. Insolvency does not “freeze” the mortgage and leave you the flat: without an agreement with the bank and continued payments, the collateral is sold.
How it differs
The opposite case is the unsecured creditor (credit card, consumer loan), satisfied only pro rata from what is left. The lien (zástavní právo) is the security right itself, and the secured creditor is the one who holds it. A creditor whose collateral was provided by a third party, e.g. parents giving additional security (dozajištění), also has the status of a secured creditor.
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