If you operate or used to operate a business and are considering filing bankruptcy and would like to pay an employee, the law can help you. Our last two blog posts were about debts owed to your employees or independent contractors. Specifically we discussed the conditions in which past wages, commissions, or benefits qualify as “priority” debt. Two weeks … Read More
In a Chapter 7 no-asset bankruptcy case, the trustee collects nothing from you and pays nothing on your debts, including your priority ones. Most Chapter 7 Cases Are No-Asset Cases Chapter 7—“straight bankruptcy”—is the most common type of consumer bankruptcy case. They are generally the most straightforward, lasting about 4 months start to finish. Usually everything you own is … Read More
In bankruptcy some debts are treated much, much better than others. Priority debts are treated much better in various important ways. Debts Are Different So the Law Recognizes Some Differences The law does not treat all debts the same. That’s because you have different kinds of creditors that you owe for very different reasons. The law tries to be … Read More
Bankruptcy resolves your debts. How it does so depends on whether your debt is secured, priority, or general unsecured. Your debts are the reason you are reading this. You want to know how bankruptcy would deal with your debts. Will bankruptcy write off all your debts? Can you keep paying some of your debts like a vehicle loan or … Read More
Overall, Chapter 7 deals with simple debts as well or better than Chapter 13 does, which deals with more difficult debts better. Debts in Bankruptcy When deciding between Chapter 7 “straight bankruptcy” and Chapter 13 “adjustment of debts” you look at many factors. You have to meet certain qualifications (usually easy to meet) to file either one. The amount … Read More
The laws about the treatment of different types of creditors can often be used in your favor to pay who you want or need to pay.
You can put a “preferential payment” to work for you if you owe a “priority” debt–back child or spousal support, or recent income taxes.
If a creditor’s proof of claim is a “priority” or secured debt is too high, object to it to avoid paying too much in your Chapter 13 case.
Here’s what happens to “priority” debts in an “asset case.”