What is a priority claim?
A priority claim in Texas creditors rights law is a claim that has priority over other creditors when it comes time to pay back creditors. This means that certain claims must be paid before any other claims, regardless of when they were made. Priority claims are often given to creditors who provided goods or services that are necessary for a situation, such as wages, taxes, and secured debts. They are also given to creditors who provided goods or services necessary for the operation of a business, such as businesses who need electricity or the government who provides services such as police and fire. Generally speaking, priority claims are given to creditors who provided goods or services necessary to the execution of a debtor’s business, unless otherwise agreed in any contract. Priority claims can also be given to creditors who are providing funds for the start-up of a business, or loans taken out to continue the operation of a business. In Texas, priority claims are given precedence over other claims, but many creditors can still make claims on the same funds.
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