What Are Priority Unsecured Claims?

Your creditors are the people or entities to whom you owe debts. In a bankruptcy case, each of your creditors has a claim against your assets. After your bankruptcy lawyer files the petition, your creditors will each file a proof of claim form. These claims against your bankruptcy estate may take the form of priority unsecured debt, secured debt, and general unsecured debt.

Unsecured claims pertain to debts that are not secured by collateral. For example, a medical bill isn’t secured by collateral, but a car loan is attached to collateral—the vehicle. A priority unsecured claim is an unsecured claim that takes priority over other claims, which means this claim must be paid first. Some examples of priority unsecured claims are child support, spousal support, and civil judgments issued against individuals who were found to be liable in another person’s death or serious injury due to intoxicated driving. These obligations must be paid in full, as they are not dischargeable in bankruptcy.

To find out which of your debts could be dischargeable in bankruptcy, contact an attorney at Cutler & Associates, Ltd.