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Introduction to Preferences

This lesson surveys the general elements of an avoidable preference and walks through the basic analysis one must employ to determine whether a preference is avoidable.

Transcript

One of the bedrock policies underlying the bankruptcy system is equality of distribution among similarly situated creditors. Nowhere is this policy brought into starker focus than in the law of avoidable preferences, codified in Bankruptcy Code § 547.

I. Preference Defined

At a high level, a preference is a prebankruptcy transfer from the debtor to a creditor that, if not set aside in bankruptcy, would put the recipient creditor in a better position than other, similarly situated creditors. If...

Lessons

    • 1. Welcome to Bankruptcy
    2. Foundations of Bankruptcy
    3. The Estate and the Automatic Stay
    4. Creditors, Claims, Discharge, and Priority
    5. Chapter 7 Liquidation
    • Chapter 7 Panel Trustee
    • Distribution of Estate Property in Chapter 7
    • Discharge in Chapter 7
    • Personal-Property Collateral in Chapter 7
    • General Grounds to Dismiss a Chapter 7 Case
    • Introduction to the Means Test and Dismissals or Conversions for Abuse
    6. Debt Adjustment in Chapter 13
    • Eligibility to File for Chapter 13
    • The Estate in Chapter 13
    • Introduction to the Chapter 13 Plan of Debt Adjustment
    • Terms Permitted in a Chapter 13 Plan
    • Chapter 13 Confirmation Requirements: Treatment of Secured Claims
    • Chapter 13 Confirmation Requirements: Treatment of Unsecured and Priority Claims
    7. Preferences
    • Introduction to Preferences
    • A Transfer to a Creditor or for a Creditor's Benefit Made for or on Account of an Antecedent Debt
    • A Transfer Enabling a Creditor to Receive More Than It Would in Chapter 7
    • The Net-Benefit Rule
    • Contemporaneous Exchanges for New Value
    • Transfers in the Ordinary Course of Business
    • Subsequent New Value