Browse:  A B C D E F G H I J K L M N O P Q R S T U V W Y Z
     
Enter a Legal Term

Search the Definitions

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 



The People's Law Dictionary by Gerald and Kathleen Hill Publisher Fine Communications