Thank you for your question; new professional here.
Basically there are 3 types of loans:
1. secured (ie there is underlying collateral-such as a car loan or a mortgage, or one secured by a lien)
2. unsecured (credit card debt)
3. priority debt (this comes into play in bankrupcy, and includes loans such as: child and spousal support, income tax, payroll and sales tax, etc)
So secured loans have priority. A judgment creditor is a creditor that secures a court judgment, and then executes on that by obtaining a lien, for example, This will change an unsecured creditor to a secured creditor; as such, this judgment creditor would have priority over nonsecured creditors.
Priority loans come into play in bankruptcy- they are the loans that are typically paid first, and that are generally not dischargeable-so that the filing of the bankruptcy does not extinguish them.
Please review this for additional information.
So the order of priority is generally:
1. specific priority loans
2. secured creditor
4. unsecured creditors
Normally a category is fully paid off before one moves to the next category unless there is a reorganization, in which case the bankruptcy trustee determines the amount to be paid to each
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Information provided is for educational purposes only. Consultation with a personal attorney is always recommended so your particular facts may be considered. Thank you and take care.