Define: Priority Debt

Priority debt refers to debts that are given higher priority in the repayment hierarchy compared to other debts. These debts are typically considered more important and must be paid off before other debts can be addressed.

Examples of priority debts include child support and alimony payments, certain tax debts, student loans, and debts owed to government agencies.

Priority debts are not dischargeable in bankruptcy, meaning they cannot be eliminated or forgiven. They must be paid off in full, even if other debts are discharged.

In some cases, priority debts can be negotiated or settled with the creditor. However, this is not always possible, especially for debts owed to government agencies or for child support and alimony payments.

Priority debts cannot be included in a debt consolidation plan. These debts must be paid separately and cannot be combined with other debts for repayment purposes.

Failure to pay priority debts can have serious consequences. For example, non-payment of child support can result in wage garnishment, suspension of driver’s license, or even imprisonment. Non-payment of tax debts can lead to penalties, interest, and potential legal action by the government.

Priority debts cannot be discharged in a Chapter 7 bankruptcy. They must be paid off in full, either through the bankruptcy process or outside of it.

Priority debts cannot be modified in a Chapter 13 bankruptcy. They must be paid off in full as part of the repayment plan.

Priority debts cannot be consolidated with other debts for repayment purposes. They must be paid separately and given higher priority in the repayment hierarchy.

Priority debts, such as child support or alimony payments, cannot be transferred to another person. These debts are specific to the individual responsible for making the payments and cannot be shifted to someone else.