Upon the dissolution of partnership business, the party to be settled first out of the proceeds realized is

Upon the dissolution of partnership business, the party to be settled first out of the proceeds realized is the secured creditors. Secured creditors are those who have a charge on the assets of the business as security for their loans or advances. They have a legal right to the assets charged and must be paid first before other creditors or partners. Unsecured creditors are those who do not have a charge on the assets of the business and are paid from the remaining assets after secured creditors have been settled. Partners' loans and advances are paid after all creditors have been settled, and partners' capital is paid last after all other claims have been settled.