Priority Debts In Chapter 7

: Reese Baker & Associates

  Filed under: Chapter 7

priority debtThere are some unsecured debts in a Chapter 7 bankruptcy that are considered to be important even though they are not secured. These debts will be the ones dealt with first when it comes to repayment. Payment would be made if the bankruptcy trustee has disbursed some of your property.

Different Debts

An example of a priority debt would be a recent liability for your income tax, which is also a debt that cannot be discharged as a result of your bankruptcy filing. While this may seem stressful, at least this debt is getting paid off which you would have to do anyway. At least the money that came from the disbursement of your property is not being used to pay off debts that would be eligible for discharge.

There are other types of priority debts that fall under the chapter 7 bankruptcy.  Employers who owe wages, salaries or commissions that falls within the 180 day period of the bankruptcy filing. This amount owed is capped at $12,475 per person. Support payments or alimony and maintenance are also priority debts. Some accident claims can be discharged but not if the claim for death or injury was as a result of driving while under the influence of drugs or alcohol.

It can get a little confusing trying to figure out how your various debts are going to be handled in your bankruptcy. For this reason and many others, you want to use the services of an experienced Houston bankruptcy attorney.