<p>In 2007, China’s property law enlarged collateral menus in credit transactions. This study utilizes a difference-in-differences method to investigate how the law impacts default risk among Chinese A-share listed firms from 2003 to 2010. The proposed findings indicate that low-fixed assets firms experience a significant decline in default risk compared to firms with high fixed assets. The results show that low-fixed assets firms relatively increase asset-based loans and long-term debt, suggesting a potential improvement in credit access following the law’s enactment. The authors further find that the law mitigates maturity mismatch, contributing to the reduction in default risk. Heterogeneity analyses show that the law’s effect is more pronounced for firms characterized by severe financial constraints, high information asymmetry, and intense product market competition. Overall, the proposed findings underscore the important role of access to collateral in mitigating corporate default risk and enrich the literature on law and finance.</p>