Priority vs. Non-priority is not an issue as to the amount of a debt or claim, but rather an issue related to the type of claim or debt involved. <\/p>\n
Priority claims are a type or category of unsecured debt that the Bankruptcy Code has given special consideration (or priority) over all other non-secured debts \u2013 the priority being that these types of debts are paid to creditors holding priority claims prior to the time that creditors holding non-priority debts are paid. Priority debts are usually non-dischargeable in bankruptcy. The most common priority debts are:<\/p>\n
– child support
\n– spousal support
\n– payroll taxes and sales taxes
\n– some types of federal income taxes
\n– damages owed as a result of the debtor causing personal injury or death of another person resulting from drug or alcohol intoxication, criminal fines, and overpayment of government benefits.<\/p>\n
Priority Unsecured Debts are described on Schedule E of the Bankruptcy petition.<\/p>\n
Non-Priority Debts are those debts that are unsecured but not given priority by the Bankruptcy Code. Non-priority debt includes unsecured credit card debt, cash advance loans, medical bills and student loans. These types of debts are usually dischargeable in bankruptcy (although student loans are not dischargeable unless the debtor can prove to the satisfaction of the bankruptcy court that not discharging the student loan debt would cause ‘undue hardship’, a fairly difficult test to establish).<\/p>\n
The explanations, details and questions regarding the types of debts that are to be listed on this form are substantial, so determining which category a debt falls into truly is a matter of reading the directions listed on Schedule E and following them.<\/p>\n
If the debt is not one of the type listed on Schedule E, and it is not secured debt, then it is Non-Priority Unsecured Debt that is to be listed on Schedule F.<\/p>\n