With the recent economic downturn and the change from an excess demand for fossil fuels to an oversupply, there has been a tremendous reduction in marine transportation requirements. As a result, both charter rates and utilization rates for vessels have rapidly fallen. The cash flow of companies operating vessels has been reduced to the point where there is insufficient net income to meet debt service on obligations that were incurred in a far better economic climate. Consequently, there are many seriously delinquent ship mortgages and unpaid maritime liens on all types of vessels, both those operating offshore, and those which work on inland waterways. This in turn has created difficult choices for borrowers and lenders. This article will address the problems faced by creditors holding ship mortgages or maritime liens on vessels when considering whether to foreclose on their collateral. It will discuss problems that arise both before and after the debtor has filed a petition for relief under Chapter 7 or Chapter 11 of the U.S. Bankruptcy Code.