NJ Bankruptcy Attorney Explains The Classification of Priority Debt
Priority debt is classified as priority by the bankruptcy code.
In New Jersey, any claim that is classified as priority is not dischargeable or eliminated in a chapter 13 or chapter 7. Typically, priority claims include, but are not limited to, the following:
- certain types of taxes;
- child and/or spousal support;
- administrative fees such as trustee or other professional’s fees.
Typically, in chapter 13, the aforesaid priority debt must be paid, in full, through the bankruptcy plan. This means that any priority claims that are due at the time of the chapter 13 bankruptcy filing must be paid through the bankruptcy trustee payments. Please note that any chapter 13 debtor who is obligated to pay ongoing support / alimony, is required to keep current with these payments during the entire bankruptcy plan.
A debtor may not eliminate or discharge a priority debt in a chapter 7. This means that the debtor will continue to be liable for the priority debt after he receives the general court discharge order. The bankruptcy laws do not require the debtor to make an immediate payment on the priority debt. However, the priority creditor is permitted to pursue the debtor, personally, for the entire priority debt as though the debtor never filed for bankruptcy protection.
Contact a New Jersey Bankruptcy Lawyer
Filing for bankruptcy is an important decision to make and should not be made without first consulting a skilled and experienced bankruptcy lawyer. NJ bankruptcy lawyer, Robert Manchel, has been helping families seek brighter futures after seeking bankruptcy protection in New Jersey for many years. Contact the New Jersey bankruptcy lawyers at The Law Offices of Robert Manchel today for a free consultation.