Priority Claims

Priority claims are unsecured claims or claims without a lien or collateral involved that are required to be paid before other claims. If a claim is secured, it is technically not a priority claim. The general rule is that priority claims must be paid in full in Chapter 13 cases. Priority claims are as follows:

• 1st Priority – Domestic Support Obligations
• 2nd Priority – Expenses of Administering the Debtor’s Estate
• 3rd Priority – Unsecured claims of creditors for debts incurred for ordinary business expenses of debtor’s business after the commencement of an involuntary case, but before a trustee is appointed or an order for relief is obtained.
• 4th Priority – Wage and fringe benefit claims, including vacation, sick and severance pay, earned by an employee.
• 5th Priority – Contributions to employee benefit plans (including health and life insurance).
• 6th Priority – Claims of persons who produce or raise grain against a debtor who owns or operates a grain storage facility; or of fishermen against a debtor who operates fish produce storage or processing facility, up to $5,775 per individual.
• 7th Priority – Claims for deposits in connection with the purchase, lease or rental of property or goods or services for personal or family needs that were not delivered or provided, up to $2,600 per individual.
• 8th Priority – Claims of governmental units, such as taxes
• 9th Priority – Debts incurred to the Federal Deposit Insurance Corporation, Resolution Trust Corporation, Director of Thrift Supervision, Comptroller of Currency, or Federal Reserve System.
• 10th Priority – Claims for death or personal injury resulting from the unlawful operation of a motor vehicle because of intoxication.