Credit bidding is a right that secured creditors have in bankruptcy sales allowing them to control the sale of their collateral. When collateral that secures a lien is proposed to be sold at a bankruptcy auction, a secured creditor is allowed to bid the amount of its debt as a credit bid, i.e. not a cash bid. Peterman: Credit bidding has been a prevalent practice in bankruptcy cases over the past several years. Typically, a distressed investor determines the fulcrum security in a company’s capital structure, acquires a controlling interest in that fulcrum security and then implements a ‘loan to own’ strategy that results in a Section sale. Depending on the type of bankruptcy you choose, you might lose your home or your vehicle, but even these items can be protected if you seek appropriate guidance and act in a timely manner. If you would like to know more about bankruptcy auctions or you would like to speak to someone about bankruptcy, we can help. Contact the Law Offices of.