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Simple English definitions for legal terms
priority
Read a random definition: GRIT
A quick definition of priority:
Priority: The right to be first in line before others. This means that certain people or organizations have the right to collect money or property before others. For example, in bankruptcy cases, the government, people who won court cases, and those who have secured loans get paid before other creditors. Mortgages, deeds of trust, and liens also have priority based on when they were recorded.
A more thorough explanation:
Definition: The right to be ahead of the rights or claims of others.
In bankruptcy law, certain creditors have priority over others when it comes to collecting debts. These include:
- Taxing authorities
- Holders of court judgments
- Secured creditors
- Bankruptcy trustees
- Bankruptcy attorneys
For example, if a business goes bankrupt and owes money to both the IRS and a supplier, the IRS would have priority and be paid first.
Priority can also apply to mortgages, deeds of trusts, or liens. These are given priority in the order they were recorded. For instance, if two people have liens on a property, the one who recorded their lien first would have priority over the second.
Overall, priority means that certain people or entities have the right to be paid or have their claims addressed before others.