preference :: legal definition
Preference - n. in bankruptcy, the payment of a debt to one creditor rather than dividing the assets equally among all those to whom he/she/it owes money, often by making a payment to a favored creditor just before filing a petition to be declared bankrupt. Such a preference is prohibited by law, and the favored creditor must pay the money to the bankruptcy trustee. However, the bankruptcy court may give secured creditors (with a judgment, lien, deed of trust, mortgage or collateralized loan) a legal preference over "general" creditors in distributing available funds or assets.
See also: bankruptcy and Related Law Terms ↓
Related Law Terms
bankruptcy :: n. a federal system of statutes and courts which p ... y proceedings trustee in bankruptcybankruptcy proceedings :: n. the bankruptcy procedure is: a) filing a petiti ... ankruptcy court claim in bankruptcy
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consign :: v. 1) to deliver goods to a merchant to sell on be ... or by order of a bankruptcy judge.
creditor's claim :: n. a claim required to be filed in writing, in a p ... e also: claim in bankruptcy probate
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priority :: n. the right to be first or ahead of the rights or ... (in the "race to the courthouse").
promissory note :: n. a written promise by a person (variously called ... lso: interest obligee obligor usury
reorganization :: n. the implementation of a business plan to restru ... also: bankruptcy corporation merger
satisfaction of judgment :: n. a document signed by a judgment creditor (the p ... ord. See also: abstract of judgment
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