What is a priority claim?
A priority claim is a type of creditor’s claim in which the creditor is entitled to be first in line to receive payment when a debtor’s assets are liquidated. In other words, if the debtor has not enough money to pay all its debts, the priority claim must be satisfied before other creditors are paid. In Oregon, priority claims generally include taxes, wages, and certain other employee-related debts. For example, if a business in Oregon is shut down and its assets are liquidated, any taxes the business owes to the state would be paid first, followed by wages owed to employees. After the priority claims have been satisfied, any assets remaining can be used to pay other creditors. Priority claims are important because they ensure that certain classes of creditors, such as employees and governments, are repaid before other creditors.
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