Question

A debtor has \( \$ 6,000 \) in non-exempt assets and the following unsecured creditors whose claims have been allowed. In what order and in what amounts will each be paid in a Chapter 7 proceeding?

Answer 1

In a Chapter 7 proceeding, unsecured creditors are paid in a specific order determined by the bankruptcy code. The order and amounts paid to each creditor depend on the priority system established by the code and the specific details of the creditors and their claims.

Step-by-step explanation:

In a Chapter 7 proceeding, the order and amount in which unsecured creditors are paid is determined by the bankruptcy code. The code establishes a priority system, where certain creditors are paid first before others. Typically, secured creditors, administrative expenses, and priority unsecured creditors are paid first, followed by general unsecured creditors.

Given the information provided, we only know the amount of non-exempt assets the debtor has, but we don't have the specific details of the creditors and their claims. Therefore, we cannot determine the exact order and amounts each creditor will be paid in this particular case.

However, to understand the general priority order, some examples of priority unsecured creditors include certain taxes, domestic support obligations, and debts arising from personal injury or death caused by driving under the influence.