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  1. #1
    Join Date
    Jul 2009
    Posts
    3

    Default Order of Claims

    state of IL

    The corporation has a lot of different type of debt, but no income.
    It's not in bankruptcy yet. But if Chapter 7 is the only option...

    Is there an order in which creditors must be paid?

    For example, do payments for goods purchased get paid before repaying investment loans made by family members?

    Or is the order of claims determined by date of bill? Or is there no order and every claimant would get paid a percentage from liquidation?

    Is there a web site with bankruptcy law broken down for laymen?

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Order of Claims

    Some debts aren't dishargeable, but you're asking only about those that are. Certain debts, such as unpaid wages, can come first. Typically next come secured debts, followed by unsecured debts. For the most part unsecured creditors will receive the same percentage of their claim, often nothing, but there are rules that give some unsecured creditors priority over others (typically in a consumer situation, such as with cash advance loans, medical bills, and unsecured credit card debt).

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