Common classifications of a creditor include (1) Secured: who has a legal right to take a specific property of the borrower and sell it in case of a default. (2) Unsecured: who does not have any such right. (3) Preferential or senior: who takes precedence over other creditors in laying claim to a bankrupt borrower's property. (4) Junior: whose claim is addressed after satisfying the claims of preferential or senior creditors.
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