Bankruptcy doesn't have to be something bad.
It can actually be the start of something good.
Your situation is unique, and it's personal.
Your attorney should be as well.

What Are the Rules on Paying Creditors during Bankruptcy?

Some debtors approaching bankruptcy may have certain creditors that they would prefer to pay off first from their liquidation proceeds or through their repayment plan. However, the law has established which creditors have priority when filing for bankruptcy. These creditors will generally receive payment before other creditors are paid.

If you’re considering filing for bankruptcy, our experienced advisors may be able to help you make more informed decisions throughout the process. For more information, contact the Birmingham bankruptcy attorneys of Greenway Bankruptcy Law, LLC, today at (205) 324-4000.

Creditor Priority

Cases of bankruptcy follow legal precedents to figure out who is paid first through the debtor’s repayment plan or liquidation. Although these creditors will rarely receive the full amount of their debts, they will receive the benefit of getting available funds before other creditors can.

In cases of unsecured debt, which is debt that isn’t tied to collateral property, the following types of creditors are given priority over others:

  • Tax agencies
  • Creditors owed child support
  • Creditors owed wages as an employee or contractor

These individuals and groups have the option to collect their funds before other unsecured debtors. This means that a debtor cannot usually choose who they want to prioritize in debt repayment.

Contact Us

If your finances have become impossible to manage, bankruptcy may be the best option available. To discuss how this legal action may work for you, contact the Birmingham bankruptcy lawyers of Greenway Bankruptcy Law, LLC, by calling (205) 324-4000 today.


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Greenway Bankruptcy Law, LLC
505 20th St N #1220
Birmingham, AL, 35203
Phone: (205) 324-4000
Tuscaloosa: (205) 737-3350
Gadsden: (256) 467-6650

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Greenway Bankruptcy Law, LLC All rights reserved. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. The following language is required pursuant to Rule 7.2, Alabama Rules of Professional Conduct. No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

Greenway Bankruptcy Law, LLC 505 20th St N #1220, Birmingham, AL, 35203 | Phone Number: (205) 324-4000