Juristdiction: USA. A small S corp is insolvent and being liquidated. Main bank account now has $0, say $2000 owed on corporate credit card account (for which I am the guarantor), $1000 in wages owed (to the other 50% owner of firm if that makes any difference).
If $1000 comes in from a payment due to the company, I believe we have to decide per Section 507 of the bankruptcy code priority if the money goes to the credit card or due wages. It has not actually declared bankruptcy in any formal way as yet, but is agreed to be insolvent and ceased trading.
What is unclear to me is if the credit card is treated as an unsecured loan, or it is permissible to treat the sum of the credit card + current account as net assets of the company that were -$2000, and are now -$1000 but still less than zero, so the credit card can be paid down before the wages.