Privileged creditor – This term is used in the area of Insolvency Law. It refers to the legal figure of an individual, corporate body, or a governmental institution that holds a judgment decision against the debtor that is secured by a special lien on the valuable asset of the debtor. The property subject to the lien is the secured creditor’s collateral. Usually the debts towards privileged creditors are called “privileged debts” or “senior debts”, and are to be paid back with priority before all other subordinated debts. So the privileged creditor will be satisfied before other creditors on the line.