Well, that’s going to depend on the kind of claim you have. Priorities in bankruptcy mean that some claims are going to be paid out of the pot of money available to pay creditors before other claims. Classic priorities are domestic support obligations, or taxes, or employee claims within 180 days before the bankruptcy, or if you’re a creditor and you’ve shipped goods to the debtor within 20 days before the bankruptcy, and you haven’t been paid you’re going to get a priority for that, and there are certain other statutory priorities. The priorities that are set forth in the Bankruptcy Code, they don’t change based upon what happens in the case. Your claim will either fit into that priority or will not fit into that priority, and most claims, unfortunately for the creditor, don’t get priority status, but most claims in a bankruptcy case unfortunately for the creditor, will not be entitled to priority treatment in the bankruptcy case.
Somebody owes me money in bankruptcy and I have a claim. Is my claim entitled to priority in the case?
Get your Free copy of
File Bankruptcy and Get Rich
Ronald J. Drescher has been practicing since 1986 in the areas of business transactions, commercial litigation, loan documentation, bankruptcy, creditors’ rights, and out-of-court workouts. His experience also includes corporate reorganizations, insolvency, business and tax planning.
