Can priority claim ever be discharged in bankruptcy?

Claims, otherwise known as debts, are paid according to this order: first, secured claims; second, priority unsecured claims; and third, general unsecured claims.

A claim is secured if obtained with the use of collateral. Mortgages, auto loans, judgment liens, and mechanic’s liens are examples of such.  On the other hand, the following fall under the category priority unsecured claims: unpaid wages, domestic support, employee benefit contributions, some tax debts, bankruptcy administrative fees, and fines ordered by the court. Finally, all unsecured debts fall under the category general unsecured claims, such as credit card bills, personal loans, student loans, medical bills, and claims resulting from a Driving Under the Influence case.

Priority claims in bankruptcy depends on what kind of bankruptcy was filed. In a Chapter 13 Bankruptcy, a payment schedule must be created, and this schedule dictates how secured claims are to be paid. Under this plan, all secured claims must be paid entirely, after which all priority unsecured claims must be paid entirely as well, before general unsecured claims can be paid. Since general unsecured claims are of the least priority, whether or not these will be paid depends on the existence of sufficient disposable funds to pay them. Any unpaid general unsecured claim left over after the Chapter 13 payment schedule, with the exception of unpaid student loans, will be discharged. Alternatively, in a Chapter 7 Bankruptcy, most priority unsecured claims cannot be discharged. General unsecured claims, however, again with the exception of student loans, will be discharged.