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Simple English definitions for legal terms

subsequent-advance rule

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A quick definition of subsequent-advance rule:

Subsequent-Advance Rule: In bankruptcy, if a debtor gives money or property to a creditor before filing for bankruptcy, the bankruptcy trustee can take it back and distribute it to all creditors equally. However, if the creditor gave the debtor new money or property after receiving the preferential transfer, and the new money or property is not secured, and the creditor has not been paid back, then the trustee cannot take back the preferential transfer.

A more thorough explanation:

The subsequent-advance rule is a principle in bankruptcy law that allows a creditor to keep a preferential transfer made by the debtor if certain conditions are met.

According to the rule, a preferential transfer will not be avoided or rescinded by the debtor's bankruptcy trustee if:

  1. The creditor extended new value to the debtor after receiving the preferential transfer
  2. The new value is unsecured
  3. The new value remains unpaid after its transfer

For example, let's say a debtor owes money to a supplier and makes a payment to them shortly before filing for bankruptcy. The bankruptcy trustee may try to recover that payment as a preferential transfer. However, if the supplier later extends new credit to the debtor and that credit remains unpaid after the bankruptcy filing, the subsequent-advance rule would apply and the trustee would not be able to recover the earlier payment.

Another example could be a bank that has a security interest in a debtor's property. If the debtor makes a payment to the bank shortly before filing for bankruptcy, the trustee may try to recover that payment. However, if the bank later extends new credit to the debtor and that credit remains unpaid after the bankruptcy filing, the subsequent-advance rule would apply and the trustee would not be able to recover the earlier payment.

subsequent | subsequent creditor

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lilypadfrog
13:01
i hope u guys would put me down like a dog that bit a baby
Trismegistus
13:02
@texaslawhopefully: i saw 3/4 down alphabet then 30- mins later 1/2 down alphabet
texaslawhopefully
13:02
so they're still calling?
Trismegistus
13:03
that i dont know
KeenHeartbreakingRattlesnake
13:03
the Penn e wave is about to cook me
atwatodbit
13:03
@sadpadresfan: did you get your Cornell scholly with your A at the same time? I think they gave me nothing...
lilypadfrog
13:04
tex also got cornell scholly ask him
texaslawhopefully
13:04
there's a form you fill out
texaslawhopefully
13:04
and they'll get back to you within a few days
13:04
@atwatodbit: they emailed me a day after submitting the form
atwatodbit
13:05
ah ok, i've seen that, just need to get parental info then. just making sure
13:05
Feeling fortunate and its my top choice as of now haha
lilypadfrog
13:06
what if you fill this out and you haven’t been admitted? just a next level move? they probably have to let you in then
PerpetualCheerfulBeaver
13:06
I applied to all my places in late september and am still waiting to hear back. ive missed all three types of waves (WL,R,A) am i screwed??
texaslawhopefully
13:07
Your guess is as good as mine. I'm in the same boat for most schools
Trismegistus
13:07
begging chicago for an A
atwatodbit
13:08
the vast majority of the t14 has not hit 50% of their As, many have not even hit 25%. zero reason for panic
PerpetualCheerfulBeaver
13:08
Thank you texas!
choosingpeace
13:08
missing CLS and Penn waves im so screwed
choosingpeace
13:08
i applied early too i hate everything im crashing out im crashing OUT
PerpetualCheerfulBeaver
13:08
I literally have no experience in this type of stuff, but if i get waitlisted, should i send an email about continued interest?
lilypadfrog
13:09
im so nonchalant
lilypadfrog
13:09
i will probably hear something back eventually
texaslawhopefully
13:10
I wish I could be like you lily
Trismegistus
13:10
im actively losingh my mind man
choosingpeace
13:10
@texaslawhopefully: lmaoo same Im crashing out so bad like it's never been this bad
texaslawhopefully
13:11
I need Chicago on Friday
Trismegistus
13:11
me too
Trismegistus
13:11
sixty coffees is having an insane cycle
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