Creditor Priority
When money is limited, order matters. Priority problems are often the reason a business crisis turns into a pile‑up.
The plain‑English idea
In a multi‑creditor situation, the loudest creditor is not always the one with the strongest right to the money. A payment made “to keep the peace” can unintentionally create bigger problems if it triggers other defaults or disrupts the correct order of payment.
Real‑world example: Paying the wrong party first
An owner paid the creditor who threatened the fastest lawsuit. That payment triggered other defaults and reduced leverage for a global solution. The lesson wasn’t “don’t pay anyone.” The lesson was: stabilize the situation, understand who is chasing what, and build a plan that prevents a creditor race.
Common questions
- Who is targeting the same pool of money (bank account, receivables, project funds)?
- What documents exist (contracts, liens, notices, judgments, tax issues)?
- Is the business being pushed into decisions that can’t be undone?
Related topics
UCC priority
UCC concepts can become real very quickly when account debtors are notified or funds are being redirected.
Trust fund claims
In some industries, money that looks like “general cash” can carry special obligations.
Workouts
Priority chaos is a major reason workouts fail—unless the plan stops the race.
Need help
If you need a fast, structured review of the situation, email contact@sesnylaw.com or call 512.761.8378.