 TITLE: Understanding Priority and Non-Priority Debt in Bankruptcy CONTENT: The Difference Between Priority and Non-Priority Unsecured Debts\n----------------------------------------------------------------\nIn a bankruptcy proceeding, the judge, in coordination with a court-appointed trustee, prioritizes the bankruptcy filer's outstanding debts. Claims by creditors—companies and individuals owed money by the person filing for bankruptcy—are reviewed by the court and ranked according to their significance.\n**Priority debts** are considered so important under federal bankruptcy law that they must be addressed before all competing claims. These include:\n*   Child support\n*   Alimony\n*   Criminal fines\n*   Unpaid federal income tax obligations less than three years old (and sometimes older)\n*   Federally backed student loans. These are a special case of priority debt: They cannot be discharged automatically through bankruptcy like non-priority debts, but pursuing a separate procedure called an \"adversary proceeding\" in conjunction with a bankruptcy filing may allow them to be discharged. Having student loan debt discharged in this manner requires you to prove that you made a good faith effort to pay the loan and that you or your dependents will suffer hardship if you are compelled to repay the loan. In contrast to regular bankruptcy procedures, in which creditors are not present in court, representatives of the lender may appear at an adversary proceeding to challenge your claims.\n**Non-priority debts** include the bulk of unsecured debts, such as:\n*   Past-due credit card bills and outstanding credit card balances\n*   Unpaid personal loan payments\n*   Private debts to friends and family members\n*   Overdue bills, including those for rent, utilities and cellphones END