Preferred creditors, secured creditors, and unsecured creditors are three basic classes of creditors in a bankruptcy procedure. What is their priority in the proceeding?

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In bankruptcy proceedings, secured creditors have the highest priority because their claims are backed by specific assets. Preferred creditors, such as employees owed wages, come next. Unsecured creditors have the lowest priority as their claims are not backed by specific assets.

Preferred Creditors, Secured Creditors, and Unsecured Creditors Are Three Basic