Order of settlement in bankruptcy proceedings

In bankruptcy proceedings, the order of debt collection is not based on chance or subjective judgment, but on the strictly regulated rules of the Bankruptcy Act. Proper application of these rules is essential to protect the rights of all creditors, preserve legal certainty, and ensure fair distribution from the bankruptcy estate. There are four types of creditors in bankruptcy proceedings: bankruptcy creditors, creditors of the bankruptcy estate, secured creditors, and creditors with a right of separation. Creditors of the bankruptcy estate The first to be paid from the bankruptcy estate are the costs of the bankruptcy proceedings and other obligations of the bankruptcy...