Priority is the legal ranking of competing claims to the same property, payment, or collateral.
In plain language, priority answers, “Who gets paid or enforced first?” It is especially important when there is not enough value to satisfy everyone.
Why it matters
Priority matters because multiple creditors can claim rights in the same collateral or debtor assets. Filing, perfection, timing, possession, statutory rules, and bankruptcy rules can all affect priority.
The term is central to secured transactions, lien disputes, foreclosure, and bankruptcy.
Where it appears
Priority appears in UCC searches, financing-statement filings, bankruptcy cases, secured-party disputes, lien litigation, and default enforcement.
Practical example
Two lenders claim security interests in the same inventory. Priority rules may decide which lender has the first claim to proceeds from that inventory.
How it differs from nearby terms
Priority differs from perfected security interest. Perfection is a legal status; priority determines ranking among competing interests.
It also differs from collateral, which is the property subject to the claims.
Related terms
Quick knowledge check
Question: What does priority decide?
Answer: The ranking of competing claims when more than one party has rights in the same property or payment.