A priority claim is an unsecured claim by a creditor in a bankruptcy proceeding that must be paid ahead of general unsecured claims. Claims are submitted by creditors to the bankruptcy court on a proof of claim form. The bankruptcy trustee then reviews these claims, resolves any objections, and issues payments to the submitting creditors. It is quite possible that a large number of priority claims will severely reduce the remaining assets of a creditor, leaving little cash available for unsecured creditors.

Examples of Priority Claims

Examples of priority claims are unpaid wages and contributions to employee pension plans. These claims must be paid out before any unsecured claims can be paid.