FindLaw Legal Dictionary

The FindLaw Legal Dictionary -- free access to over 8260 definitions of legal terms. Search for a definition or browse our legal glossaries.

Term of the Day: Preference

Preference n

1 : the right to prior payment of a debt [with over the creditors of the heirs or legatees "Louisiana Civil Code"]
2 : the transfer of an insolvent debtor's interest in property to a creditor for an earlier debt that gives the creditor more than the creditor would otherwise receive (as under a bankruptcy settlement) called also voidable preference compare antecedent debt at debt, fraudulent conveyance general assignment at assignment NOTE: Preferences can be voided by a bankruptcy trustee because they diminish the bankruptcy estate out of which other creditors will be paid. Preferences must be made during a period (as 90 days before the date of filing a bankruptcy petition) established by bankruptcy law in order to be voidable. Perfection or grant of a security interest during this period is also a preference. The bankruptcy law states exceptions under which payments to creditors are not voidable preferences.
3 : priority


Source: Merriam-Webster's Dictionary of Law ©1996. Merriam-Webster, Incorporated. Published under license with Merriam-Webster, Incorporated.

Browse Alphabetically (A - Z)

[0-9] | A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z