Akademik

pref·er·ence /'pre-frəns, -fə-rəns/ n

1: the right to prior payment of a debt

with preference 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

◇ 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