When you file for Chapter 13 bankruptcy, you must create a repayment plan that lists all of your debts, but the court does not treat every debt the same. According to the United States Courts, debts you must repay in full become priority debts.
Your priority debts will help your trustee to determine if your repayment plan will work because he or she will have to ensure that your income allows for the full repayment of these debts and still leaves you enough money to take care of your regular expenses. You may not pay back other debts you have or you may only repay a small portion of those debts.
Characteristics
Priority debts are those which you cannot discharge from bankruptcy. You have to be able to fully repay them. However, some creditors of these debts may make an agreement to accept less than the full amount.
Examples
Examples of priority debts include taxes, child support and the costs associated with your bankruptcy, such as fees. These debts often have a court order or they are owed to a government entity.
Secured debts
One word about secured debts, such as a mortgage or auto loan: if you decide to keep the collateral you used to secure the debt, then you must repay at least the value of the collateral. While this may seem like these debts become a priority, they are not because you could discharge these debts if you wanted to give up the collateral. You still must repay true priority debts prior to paying secured debts of any kind.
