A prior creditor is an individual or entity that is owed money by another party. They hold a claim that takes precedence over any other claims and will be the first to be paid if there are insufficient funds to pay all creditors. For instance, if someone has debts to two individuals and can only afford to pay one, the prior creditor will receive payment before the other.
An individual or entity that has a claim against a debtor before the debtor’s order for relief is known as a prior creditor. This gives them a higher priority in receiving payment from the debtor’s assets compared to other creditors. For instance, in the event of a company’s bankruptcy, the prior creditor with a claim prior to the filing will be paid first from the company’s assets before other creditors. Similarly, a mortgage lender with a lien on a property has the right to foreclose on the property and sell it to recover the debt before any other creditors can make a claim on the property.
No, once a debt has been discharged in bankruptcy, the prior creditor is no longer able to collect on it.
No, once a debt has been discharged in bankruptcy, the prior creditor is not allowed to garnish your wages for that debt.
No, once property has been included in a bankruptcy filing, the prior creditor is not allowed to repossess it.
No, once a debt has been discharged in bankruptcy, the prior creditor is not able to sue you for that debt.
No, once a debt has been discharged in bankruptcy, the prior creditor is not allowed to continue reporting it on your credit report.
No, once a debt has been discharged in bankruptcy, the prior creditor is not allowed to contact you about that debt.
No, once a debt has been discharged in bankruptcy, the prior creditor is not allowed to sell it to a collection agency.
No, once a debt has been discharged in bankruptcy, the prior creditor is not allowed to place a lien on your property for that debt.
No, once a debt has been discharged in bankruptcy, the prior creditor is not able to pursue legal action against you for that debt.
No, once a debt has been discharged in bankruptcy, the prior creditor is required to release any liens on your property related to that debt.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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