Administrative claims have first priority. These include any expenses incurred by the trustee in the locating, recovery and sale of assets and the commission paid to the trustee. Wage claims also get priority status. For individuals, the most common type of priority debt owed is federal or state income tax. In addition, if the IRS or a state tax bureau has made a new assessment within eight months of the filing, the tax debt must be listed as a priority and will have to be paid in full despite filing for bankruptcy.
Secured debts are obligations associated with specific items of property.
For example, most home buyers obtain mortgages. If the mortgage is not paid, the lender can foreclose on the house that secures the debt and get the house. This is the nature of a secured debt. Other assets that are typically encumbered by such debts are cars, furs, appliances, jewelry, cooperative apartments, condominiums and others. Generally, even though a bankruptcy has been filed, a secured debt must be paid in full if you wish to keep the secured asset.