The Estate Distribution Priority In Chapter 7 Bankruptcy Administrations

First payment is made upon secured claims, according to statutory priority. Secured tax claims and statutory liens are paid first, then general secured claims. As a last priority, general unsecured creditors receive a pro ratta distribution of remaining assets, if any. In most cases filed under Chapter 7, no assets are available for distribution from individual estates because of the application of appropriate exemptions.

In a few cases however, individuals must surrender non-exempt assets voluntarily or suffer property seizure. The trustee is entitled to costs of administration, after deducting third party expenses, which renders ordinary personal property for used goods almost worthless. Larger assets, including real estate, vehicles, boats and financial accounts, are far more likely to be subject to an order for turnover.