How does a priority unsecured claim differ from a nonpriority unsecured claim?
A priority unsecured claim is an unsecured claim that is given priority of payment under the Bankruptcy Code. Priority unsecured claims include the following types of claims: the administrative expenses of the Chapter 11 case, wage claims of up to $10,000 per employee, wage benefit claims of employees up to certain limits, consumer deposit claims of up to $2,225 each, most divorce-related claims, and tax claims. Administrative expenses include the fees of the debtor’s attorney and unsecured debts incurred in the ordinary course of operating the debtor’s business during the case. A nonpriority unsecured claim is a general unsecured claim incurred against the debtor prior to the filing of the Chapter 11 case. The claims of most trade creditors are nonpriority unsecured claims.
