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Originally Posted by Track Collector
..... Mr. Wagner will then be able to collect some/all of his $2.5 MD, depending on where he falls on the creditor list. With few exceptions, liquidated assets are paid out to those are owed the most first...
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It is my understanding that claims against a bankruptcy estate are (by law) prioritized by the type of claim. For example, a secured creditor would get paid before an unsecured creditor. Mr Wagner would be in the same class of claims as any other account holder with an unpaid balance. If there is insufficient money to pay the class of claims that includes the account holders, they would all be paid on a pro-rata basis with the remaining money.
