Legal Definitions - priority

Definition: The right to be ahead of the rights or claims of others.

In bankruptcy law, certain creditors have priority over others when it comes to collecting debts. These include:

• Taxing authorities
• Holders of court judgments
• Secured creditors
• Bankruptcy trustees
• Bankruptcy attorneys

For example, if a business goes bankrupt and owes money to both the IRS and a supplier, the IRS would have priority and be paid first.

Priority can also apply to mortgages, deeds of trusts, or liens. These are given priority in the order they were recorded. For instance, if two people have liens on a property, the one who recorded their lien first would have priority over the second.

Overall, priority means that certain people or entities have the right to be paid or have their claims addressed before others.