Loans and Grants

When one party (the “creditor”) lends money to another party (the “debtor”), the creditor often wants to receive collateral (a lien on something of value) at the same time the loan is made.  If the debtor fails to repay the creditor or otherwise fails to comply with the terms of the loan, the creditor can then take the collateral from the debtor, sell it, and use the proceeds from the sale to satisfy the loan.  The creditor’s interest in the collateral is called a “security interest”. If the collateral is personal property and not real estate, the rights of the …