3 Groups of Creditors Given Priority in Bankruptcy
When a person files for bankruptcy protection, they may wish to prioritize certain creditors over others. However, the law rarely allows for flexibility of this kind. Instead, a person’s repayment generally will conform to the standard procedure established by the law and case precedents.
If you are considering filing for bankruptcy, we can help you to understand the effects and requirements of different kinds of bankruptcy cases. To discuss your options with an experienced advisor, contact Florida bankruptcy lawyer Ryan J. Really, Attorney at Law, PLLC, by calling (239) 237-0675 today.
Priority in Bankruptcy
A debtor filing for bankruptcy has two options when they want personal bankruptcy protection. The first type of bankruptcy, Chapter 7 bankruptcy, aims to repay creditors by using proceeds from the sale of a debtor’s non-exempt property. Chapter 13, the other form of personal bankruptcy protection, allows a debtor to establish a repayment plan that will satisfy creditors while being more in line with a debtor’s actual ability to pay. In either case, a debtor will not usually be allowed to influence the order in which debts are paid.
The following parties are given priority in cases of unsecured debt, or debt without collateral:
- People owed child support money
- People owed wages
- Government tax agencies
These groups are granted priority payment by the bankruptcy courts, meaning that other unsecured creditors may be given whatever payment is available after these creditors have been paid.
If your finances have pushed you towards filing for bankruptcy, we can help you throughout all phases of your case. Contact Florida bankruptcy attorney Ryan J. Really, Attorney at Law, PLLC, at (239) 237-0675 today.