A secured creditor is a lender that has placed a lien on certain assets of a borrower. If the borrower does not pay the underlying debt, the creditor can seize these assets and liquidate them in order to obtain payment. In the event of a bankruptcy, secured creditors must be repaid in full before any funds are made available to unsecured creditors.
For example, a mortgage lender is a secured creditor, because it has a lien on the property for which it is providing a mortgage. If the mortgage holder does not pay on a timely basis, the lender takes back the property.