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Priority Debts in Bankruptcy | What You Need to Know

If you are someone who has recently compiled a large amount of debt and you are unsure of how to proceed, there is a very good chance that you are ready to file for bankruptcy. In many ways, bankruptcy is a useful tool to help individuals regain control of their lives by discharging their debt and allowing them to restructure their finances. That being said, this can only be done with the assistance of an experienced New Jersey bankruptcy attorney at their side.

Our firm has handled various bankruptcy cases over the years, and we know we have what it takes to do the same for you. Time is of the essence, and you most likely have various questions about the process ahead, such as, “what are priority debts?” Please continue reading and speak with our knowledgeable firm to learn more about bankruptcy, priority debts, and how we can help you get your life back on track. Here are some of the questions you may have:

What Are the Different Types of Debt?

There are various debts of debt, in large part because individuals frequently have various types of creditors. The three most common forms of debt are general unsecured debt, secured debt, and priority debt. General unsecured debt is not a priority debt, and the creditor will have no security over this debt. Secured debt generally comes in the form of mortgages or liens, and in these types of debts, creditors are permitted to pursue specific pledged property on default.

What Are Priority Debts?

Essentially, priority debts are the most important types of debt that an individual will have to pay off. They are usually unsecured, however, they often have liens, which makes them secured. Priority debts must be paid in full, no matter what.

Generally speaking, priority debts are such because they are seen as extremely important obligations. For example, if you are a divorced individual and your divorce agreement calls for alimony payments or child support payments, you cannot simply disregard making these payments, as it would put your former spouse or your child in danger. That being said, if you are someone who has injured another party and that party sued you in a personal injury claim, you are required to pay off that debt–you cannot discharge that debt when filing for bankruptcy. If you have any additional questions, please do not hesitate to speak with our knowledgeable Edison bankruptcy attorney today. Our firm is here to help.

Contact Our Experienced New Jersey Firm

Juan C. Velasco, Esq. is a trusted attorney who concentrates on bankruptcy, family law, real estate, and estate matters who has been serving the New Jersey area for over 25 years. If you need experienced legal counsel, please contact Velasco Law Office and we will be happy to assist you.