In the subordination agreement, priority is given to secured debts that are arranged one behind the other in order to recover the amount of repayment from the debtor in the event of foreclosure or bankruptcy.
the creditor second in line receives a penalty only when and if the priority creditor has paid in full.
Subordinated debt is riskier than higher priority loans, so lenders typically charge higher interest rates to compensate for taking on this risk.
Subordination agreements are usually used when there are several mortgages for one property.
Bankruptcy is a legal proceeding carried out in order for individuals or legal entities to be freed from their debts, while at the same time providing creditors with the opportunity to repay them.
A debtor in possession (DIP) is an individual or entity that has filed for Chapter 11 bankruptcy protection but still owns property that creditors have legal claims under a lien or other lien.
A bond is a court decision that gives the creditor the right to take possession of the debtor’s property if the debtor fails to fulfill its contractual obligations.
The lifetime cost of a product or service refers to the total cost of owning it over its lifetime in addition to the initial purchase cost - in business you may hear this called TCO (Total Cost of Ownership).