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The secured creditor enjoys several advantages over his unsecured brethren. If
the debtor defaults on his obligation, the secured creditor is sometimes empowered
to take matters in his own hands, sell the property covered by his security, and reimburse
himself out of the proceeds without the time and expense of the lawsuit to
which the unsecured creditor must resort. If the debtor disposes of all of his property,
the secured creditor's claim, if properly perfected, follows the property into the hands
of the transferee and may be satisfied therefrom without the necessity of litigation to
establish that the transfer was a fraudulent conveyance. If unsecured creditors go
after property of the debtor to satisfy their claims, the secured creditor's interest in
the property covered by his security, if properly perfected, is immune from their levies.
And if the debtor goes into bankruptcy, the secured creditor has first claim on the
proceeds of the property covered by his security, after which he shares pro rata on
any unpaid balance with the full claims of unsecured creditors in the remainder of
the debtor's assets.
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