In Chapter 7 bankruptcy, priority debts are unsecured debts that are considered sufficiently important to jump to the head of the bankruptcy repayment line.
If a Chapter 7 trustee disburses property in the course of the Chapter 7 case, priority debts get paid first. This can be very helpful when the priority debt can’t be discharged in your bankruptcy (which is usually the case). For example, your recent income tax bill is both a priority debt and a debt that can’t be discharged in bankruptcy. Getting the taxes paid off with your property sale proceeds is a lot better than if the money were to go to pay off debts you could discharge in your case.
(To learn more about Chapter 7 bankruptcy, including when the trustee will liquidate your property and what debts are not discharged, see our Chapter 7 Bankruptcy area.)
Priority debts that might come up in consumer bankruptcies include (as of April 2016):
To learn how other debts are treated in Chapter 7, see Your Debt in Chapter 7 Bankruptcy.