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LSDefine

Simple English definitions for legal terms

preference

Read a random definition: PCT filing

A quick definition of preference:

Preference in law is a way for a trustee to get back money that a debtor paid to creditors before filing for bankruptcy. The trustee can only do this if the payments were made within a certain time period, usually 90 days, and meet other requirements. This is done to discourage creditors from demanding too much money from someone who can't pay, which could cause them to go bankrupt and hurt other creditors.

A more thorough explanation:

In law, preference refers to a tool used in bankruptcy called recapture. This allows a trustee to recover payments made by the debtor to creditors before the bankruptcy proceeding. The purpose of recapture is to prevent creditors from aggressively pursuing payments from insolvent debtors, which could lead to bankruptcy or harm other creditors' claims.

In order for a trustee to recapture preference payments, the payments must meet certain requirements:

  • The payments must have been made within a set period of time, usually 90 days for most creditors.
  • The payments must exceed what the creditor would receive in a Chapter 7 liquidation action.

For example, if a debtor owes money to two creditors and pays one of them $10,000 within 90 days of filing for bankruptcy, the trustee may be able to recapture that payment if it exceeds what the creditor would receive in a Chapter 7 liquidation. This means that the trustee could take back the $10,000 payment and distribute it among all the creditors equally.

Overall, preference is a bankruptcy tool that helps ensure fair treatment of creditors and prevent aggressive collection actions that could harm the debtor's financial situation.

Preemptive right | preferred dividend

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Dkk
19:42
SEO is big money
2016 pushed the conservative party into populism irreversibly
Dkk
19:43
Maybe, but if this is populism, then every election is populist.
19:43
@Dkk: yeah register 1 website and every swinging tom dick and harry calls/emails/texts to 'help with seo'. like bruh, if YOU found it, what i am doing is working
Dkk
19:43
Indeed!
19:48
wasp, i think people are hopeful for a gov who at least attempts to care about the common man
MIAMI A
[] AromaticTroubledDormouse
20:55
How does one know if they are UR1 or UR2?
[] AromaticTroubledDormouse
20:56
CONGRATS MACAQUE!
TY
got a random stanford email and almost had a heart attack
ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
Dkk
2:21
NDLS and Fordham took a very long time last year. It's good info for people to know.
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