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Priority Debts

Learn about particular unsecured debts that receive priority distribution in chapter 7 and special treatment in other chapters.


I. Introduction to Priority Debts

In general, if one debt has priority over another, then the higher-priority debt must be paid in full before the lower-priority debt sees the first dime. In bankruptcy, priority unsecured debts are itemized unsecured debts that, in chapter 7, must be paid in full, from the bankruptcy estate, before general unsecured claims receive anything.

Bankruptcy Code § 507(a) lists several types of priority debts, including domestic-support obligations; enumerated taxes;...