What is the meaning of “priority debt”?

"Priority debt" is a legal term used to describe certain debt that has a higher priority in receiving payments or other forms of compensation than other debt. This type of debt will usually be paid off first before any other debt when seeking repayment. In Washington, priority debt is determined by the Washington State Uniform Commercial Code. This code establishes a ranking of debts that must be paid in a certain order. Generally speaking, priority debt will include taxes, wages, and liens. It’s important to note that secured creditors, such as banks and other financial institutions, will be given priority over unsecured debt, such as credit cards or personal loans. Creditors also have the right to collect on their priority debt. Creditors can do this by taking the debtor to court and securing a judgment against them. Generally, the court will then require the debtor to pay the creditor their priority debt on a specific timeline that is set out in the judgment. If the debtor does not abide by the judge’s order, they could face certain consequences, such as wage garnishment. The concept of priority debt is important for all Washington residents to understand because it can help protect creditors and ensure that they are being paid back before any other debt is collected. Failure to pay priority debt could result in serious consequences, so it is important to be aware of it and fulfill any payments to priority debt promptly.

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What is the meaning of “priority debt”?

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