Bankruptcy: 507 Priority for Unsecured Creditors

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Bankruptcy: 507 Priority for Unsecured Creditors

Postby A'nold » Sun Dec 12, 2010 2:23 am

I must have been absent during this section b/c I can't for the life of me remember (or find in my notes) how 507's priority scheme works. Does it matter that 1 comes before 3 or do all priority creditors get a pro rata share IN FULL before general unsecured creditors or does each priority unsecured creditor get paid in full before the next priority unsecured creditor gets any money?

Thanks. :)

Edit: 726(a)(1) says that "property of the estate shall be distributed: (1) first, in payment of claims of the kind specified in, and in the order specified in, section 507...."

That helps a little, but I still really need to know about the pro rata share vs. paid in full situation. Also, I wonder if ALL 507 priority unsecured claims must be paid in full before ANY general unsecured claims under :wink:

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