Priority Among Creditors

Who Gets Paid First?

Priority rules determine which creditor has superior rights to collateral when multiple parties claim the same property.

• Perfected security interests generally have priority over unperfected interests.
• Earlier perfected interests usually take priority over later perfected interests.
• Certain purchase-money security interests may receive special priority if legal requirements are satisfied.
• Some statutory liens may take precedence over security interests.

Priority often follows the principle: first to perfect or first to file.