What is the order of priority for paying creditors in a Chapter 7 bankruptcy? Explain your answer.© BrainMass Inc. brainmass.com October 9, 2019, 6:09 pm ad1c9bdddf
The Bankruptcy Code establishes the order in which claims are paid from the bankruptcy estate.
All claims in a higher priority must be paid in full before claims with a lower priority receive anything. All claims with the same priority share pro rata. Claims are paid in this order: 1) costs of administration 2) priority claims and 3) general unsecured claims. Secured claims are paid from the proceeds of liquidating the collateral ...
This discusses the order of priority for paying creditors in a Chapter 7 bankruptcy