Priority Claim

Category: legal

An unsecured claim that is entitled to be paid ahead of general unsecured claims according to the Bankruptcy Code.

Priority claims are the "VIP line" for unsecured debt. Public policy dictates that certain debts must be paid first to protect society. Examples include unpaid employee wages, recent tax debts owed to the IRS, and domestic support obligations (alimony/child support).

Common Examples

• The unpaid salaries of the factory workers were treated as a priority claim, ensuring they were paid before the trade suppliers.
• Any unpaid payroll taxes automatically jump to the front of the line as a priority claim, which the IRS enforces aggressively.