P is for Preference

A preference in bankruptcy is a situation where a debtor “prefers” one creditor of the same class over another creditor. In more precise terms, it is a payment or transfer by an insolvent debtor, made to a creditor on a preexisting debt which allows the preferred creditor to receive more than they would in a Chapter 7.

Some preferences are OK. For example, you can pay things like taxes or child support before other creditors since they generally are the highest priority creditors. You could also choose to pay secured creditors before unsecured, non-priority creditors.

The biggest problems occur when you pay back friends or family members before filing. Since most family loans are unsecured, paying your family or friends back while not paying back other creditors will be a preference. There are ways to avoid these problems, but you need to talk to your attorney first. We can only fix the things we know about.

For more P terms:
Plan-Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell
Pay Advice-New York Bankruptcy Lawyer, Jay S. Fleischman
Preferences-Colorado Springs Bankruptcy Attorney Bob Doig
Phone Call-Cleveland Bankruptcy Attorney, Bill Balena
Pride-Southgate, Michigan Bankruptcy Lawyer, Christopher McAvoy
Property of the Estate-Wisconsin Bankruptcy Lawyer, Bret Nason
Property of the Estate: The key to when a lien can be stripped by the bankruptcy court.-Philadelphia Suburban Bankruptcy Lawyer, Chris Carr
Privacy-Metro Richmond Consumer and Bankruptcy Attorney, Mitchell Goldstein
Payment-Jacksonville Bankruptcy Attorney, J. Dinkins G. Grange
Preference-Marin County Bankruptcy Attorney, Catherine Eranthe
Priority-Bay Area Bankruptcy Lawyer Cathy Moran
Planning-Los Angeles Bankruptcy Attorney, Mark J. Markus
Personal Bankruptcy-Livonia, Michigan Bankruptcy Attorney, Peter Behrmann

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