Simple English definitions for legal terms
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Avoiding Power
Avoiding power is the ability to cancel or void certain transfers or obligations made by a debtor in bankruptcy. This includes fraudulent conveyances, preferences transferred to creditors, unperfected security interests in personal property, and unrecorded mortgages. It is a power held by a bankruptcy trustee or debtor in possession.
These examples illustrate how avoiding power can be used to prevent debtors from unfairly favoring certain creditors or transferring assets to avoid paying debts. It helps ensure that all creditors are treated fairly in the bankruptcy process.