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Priority, secured and unsecured are the three classifications of debts in a bankruptcy. A secured debt needs a property as collateral, which can be confiscated by the creditor in case the debtor fails to pay off the debts. Mortgage loans are mostly secured by homes. Car loans usually have the car as collateral.
An unsecured debt does not have any collateral as a security. Thus, in case of failure to pay the debts, the creditor will not be able to take the debtor’s property without getting any judgment.
Priority debts are required to be paid before any other owed debts. Such debts include taxes and some attorney fees. 11 U.S.C. §507 has a list of all the priority debts.
You can contact the Recovery Law Group for any bankruptcy and debt related queries. They are the best bankruptcy attorneys of Los Angeles & Dallas, TX. Visit www.recoverylawgroup.com or call on 888-297-6203.