Unsecured parties have priority over secured parties to the proceeds from the disposition of collateral on the distribution of a debtor's estate.

Question

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This statement is false. Secured parties have priority over unsecured parties to the proceeds from the disposition of collateral on the distribution of a debtor's estate. This is because secured parties have a security interest in the collateral, giving them a right to be paid from the proceeds before unsecured creditors.

Unsecured Parties Have Priority Over Secured Parties to the Proceeds