Priority for paying creditors in a Chapter 7 bankruptcy
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What is the order of priority for paying creditors in a Chapter 7 bankruptcy? Explain your answer.
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This discusses the order of priority for paying creditors in a Chapter 7 bankruptcy
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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 ...
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