Priority Debt
A priority debt is best defined as a debt that receives priority payment status over other debts listed in the bankruptcy. This type of debt includes past due IRS debt assessed less than 3 years prior to the petition filing date, Child Support arrears, bankruptcy attorney fees, etc. Some IRS debt is classified as unsecured due to the assessment date being more than 3 years prior to the petition filing date. Unsecured IRS debt can be discharged in a bankruptcy and the IRS can no longer attempt to collect this debt. They can however, offset future refunds against the debt that has been discharged.
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