There are few things more nerve-wracking than compiling debt and being unable to pay your bills and uphold your standard of living. If you find yourself in this situation, there is a very good chance that your family’s future is at stake. Fortunately, there may be a solution: filing for bankruptcy. Though this may seem like a huge jump, the truth is, it’s most likely a far less damaging prospect than you may think. That being said, one of the questions at the forefront of your mind at the moment may be “what are priority debts, and how do they relate to bankruptcy?” Our firm is here to help. Please continue reading and speak with our knowledgeable New York bankruptcy attorney to learn more about priority debts and how we can help you through every step of the bankruptcy process ahead. Here are some of the questions you may have:
Are there different types of debt?
There are, and this is mainly because people oftentimes have several types of creditors. Priority debt, secured debt, and general unsecured debt are the three most common types of debt that our firm handles. That being said, general unsecured debt is not a priority debt, which means that creditors do not have security over this debt. Mortgages or liens are generally considered secured debts, which means that creditors are capable of pursuing specific pledged property on default.
What is priority debt?
Priority debt is the most urgent debt that you must pay off. In most cases, priority debts are considered unsecured, though they frequently come with liens, thereby making them secured. These debts are required to be paid in full, which means that they cannot be discharged in bankruptcy, however, you can work out a repayment plan in your bankruptcy filing. Some examples of priority debts are as follows:
- Alimony/Child Support Payments: If you are someone who stopped making alimony or child support payments for any reason, there is a very good chance that you will face serious consequences if you are caught doing so. These are considered priority debts because failing to pay them would put your former spouse or child in harm’s way/
- Personal Injury Payments: If you recently injured another party due to negligence and were required to pay compensation as part of a personal injury lawsuit, this is considered a priority debt that cannot be discharged in bankruptcy.
Contact our experienced Rockland County, New York firm
The Law Offices of Allen A. Kolber, Esq. effectively represents clients facing Bankruptcy in Rockland County and all of New York State. Our firm understands the stress one can feel when facing a difficult financial future. Our compassionate staff will work to ease your fears and help you make a new start. If you need quality legal support, contact The Law Offices of Allen A. Kolber, Esq.