Liquidation proceedings destroy the creditor's independent right to enforce full payment of the debt or in any way obtain a new advantage over other creditors. This change in the normal incidents of property in a debt is necessary in order to distribute the limited fund equitably. But in applying this principle, previously acquired rights by way of lien upon specific property must be respected.
Fred T. Hanson,
THE SECURED CREDITOR'S SHARE OF AN INSOLVENT ESTATE,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol34/iss3/2