Imade's Bakery has been put into involuntary bankruptcy by its creditors. Catalan Bank owns the mortgage on the shop and the land on which the bakery is built. Imade's Bakery still owes $150,000 on the mortgage, and the land is valued at $185,000. Including the land, the bakery has $200,000 in assets, and it owes its creditors $400,000. Will Catalan Bank recover all of the money it is owed on the mortgage? No, the bank will only recover a portion of the money as the bakery's assets have to be distributed equally among the creditors. No, a mortgage is an unsecured loan, and the bank is only likely to recover a portion of its assets after secured credits have been paid. Maybe, it depends on the bank's priority in the claim process. Yes, provided the land sells for its valued price of $185,000. Loans, like mortgages, that are secured by specific collateral are paid first