Priority Debt for Driving While Intoxicated
If you injured someone by unlawfully driving while intoxicated, the resulting personal injury debt would be a priority debt in bankruptcy.
Paying Employee Debt in Chapter 13
If you prefer to pay back wages to a present or prior employee, you can do so in Chapter 13 especially well if that debt is a priority one.
Paying Employee Debt in Bankruptcy
If you prefer to pay employee debt, back wages, to a present or prior employee, bankruptcy can help you do so if you use the law in that employee’s favor.
Independent Contractor Commissions
If you owe sales commissions to an independent contractor when you file bankruptcy, it may be a priority debt. Here's what determines this.
Wages Owed to an Employee
If you owe employee wages when you file bankruptcy, that debt may or not be a priority. Here’s what determines this and why it matters.
Priority Debts in No-Asset Cases
Priority debts are largely unaffected by a Chapter 7 case--it does not discharge them, so you need to pay them after finishing your case.
Priority Debts in an Asset Chapter 7 Case
Your Chapter 7 trustee may pay your priority debts--in full or in par--through the proceeds of the sale of your unprotected, not exempt assets.
Priority Debts
One of the most important aspects of bankruptcy is that all debts are not equal. "Priority" debts are treated special in a number of ways.
List all Creditors in Your Bankruptcy Case
If you don't list a debt in your bankruptcy case, and don't add it in on time, it may not be written off. So carefully include all debts.
Your Debts in Bankruptcy
Bankruptcy is about debts. Different categories of debts are treated differently. The categories are secured, priority and general unsecured.
Limited Automatic Stay Protection for Unpaid Child/Spousal Support
Chapter 7 doesn't stop collection of unpaid support, but may enable you to catch up. Chapter 13 does stop this collection, conditionally.
“General Unsecured Debts” in Chapter 13
You pay your general unsecured debts only as much as you can afford during a Chapter 13 plan, with the rest then legally written off forever.
“General Unsecured Debts” in Chapter 7
In a Chapter 7 case all or most "general unsecured debts" get "discharged"--legally written off. That's one of the big benefits of Chapter 7.
Unsecured Debts in Bankruptcy
Your debts are either secured by something you own, or they are unsecured. Unsecured debts are either "priority" or "general unsecured."
Chapter 7 or 13? You May Be Surprised
Chapter 7 takes about 4 months, while Chapter 13 takes 3 to 5 years, and likely costs more. But that doesn't begin to answer which is better.
