Skip to main content

Are you a legal professional? Visit our professional site

Please enter a legal issue and/or a location
Begin typing to search, use arrow keys to navigate, use enter to select

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.

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.

Copied to clipboard

Find a Lawyer

More Options