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Priority Claims in Bankruptcy

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Nonpriority Unsecured Claims

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These claims include general unsecured debts without a specific priority status, such as credit card debt, and are paid after all priority claims.

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Student Loan Claims

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While difficult to discharge, student loans are unsecured and have no special priority, thus they are paid after all priority claims but before equity holders.

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Employee Benefit Plan Claims

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Claims arising from contributions to employee benefit plans fall after wage claims in the priority order and are subject to similar limits.

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Fines and Penalties Owed to Governments

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Claims for non-compensatory fines and penalties owing to governmental units may be given a lower priority in payment.

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Wage Claims

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Wage claims come from employees' earned but unpaid wages, with a specified limit, and are to be paid after secured and administrative expenses.

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Consumer Deposits

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Claims for consumer deposits, like layaway or rental deposits, are given a priority and paid after alimony and child support claims, up to a certain amount.

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Subordinated Debt

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Subordinated debts are lower in priority than general unsecured claims and are often paid only if all other claims have been satisfied.

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Equity Interests

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Equity interest holders, including shareholders or partners, are last in priority and typically receive payment only if all creditors have been satisfied.

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Secured Claims

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Secured claims have the highest priority as they are backed by specific collateral. They are paid from the proceeds of the collateral's sale.

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Injury Claims Due to Drunk Driving

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Claims arising from personal injury due to intoxication of the debtor are prioritized and generally paid after other priority unsecured claims.

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Postpetition Claims

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Claims arising after the bankruptcy filing date, these may be treated differently depending on the circumstances and type of bankruptcy filing.

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Administrative Expense Claims

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Administrative expenses are second in line for payment. They include costs of preserving the estate and expenses for managing the bankruptcy process.

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Priority Unsecured Claims

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These claims are third in priority and include unsecured debts viewed as important to the system, such as certain taxes and employee wages.

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Alimony and Child Support Claims

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These personal claims are given high priority and are paid following the payout of administrative and wage claims.

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Unsecured Tax Claims

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Certain tax obligations are classified separately and given a priority status, paid after priority unsecured claims.

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