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    MarkL187's Avatar
    MarkL187 Posts: 1, Reputation: 1
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    #1

    Nov 17, 2006, 02:45 AM
    What is Residual Creditors
    What is the technical definition of Residual Creditors? Can you give an example of this. How does it differ from Trade Creditors?
    manik chand dey's Avatar
    manik chand dey Posts: 63, Reputation: 2
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    #2

    Jun 20, 2008, 10:09 PM
    I think residual creditors are similar to unsecured creditors. Because in case of bankruptcy they are the last to receive their payments(residual amount) after paying to all the secured creditors.

    Trade creditors are the creditors who supply goods or services on credit, normally free of cost(that is without any interest) generally for a period of 60 to 90 days. It is sometimes called spontaneous source of financing as it comes without any specific negotiations with the supplier.

    similarity
    So if we can say both residual and trade creditors don't have any lien on the assets of the business.

    Dissimilarity
    Normally residual creditors are considered as long term while, trade creditors are for short term period.
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