When a debtor makes a transfer favoring one creditor over other creditors this constitutes a?
A preferential transfer is a payment a debtor makes to one or more creditors before filing for bankruptcy that results in paying back an unequal amount of debt to their other creditors. It gives preferential treatment to some creditors over others, and a bankruptcy trustee may decide to claw back the payment.
What is the term for making an unfair payment to a creditor before bankruptcy?
An avoidable preference is a payment you make to a creditor prior to bankruptcy that the trustee can get back.
What is a preference payment in bankruptcy?
A preferential debt payment is a payment made for the benefit of certain creditors shortly before filing for bankruptcy. The bankruptcy trustee appointed to administer your case has the power to avoid (undo) a preferential payment transaction, recover the funds, and use the money to pay other creditors.
What is the preference period for bankruptcy?
90 days
How do you avoid preference claims?
The following list of available defenses is not complete, but it does include the most common and widely used defenses to preference claims.
- Substantially Contemporaneous Exchange.
- Payments in the Ordinary Course.
- Purchase Money Security Interests.
- New Value Defense.
- Floating Lien or Improvement in Position.
What is new value in bankruptcy?
Simply stated, the “new value” defense provides that, to the extent a creditor gives “new value” (usually in the form of additional goods or services provided on credit) to the debtor after receiving preferential payments, the creditor is entitled to reduce its preference exposure by offsetting the new value against …
Does new value need to remain unpaid?
Accordingly, the Code disallows the new-value defense when ‘on account of the new value, the debtor responds with ‘otherwise unavoidable transfer to or for the benefit of [the] creditor. ‘ That is, the new value must remain unpaid in order to reduce the creditor’s preference liability.
What is a voidable preference?
An unfair preference (or “voidable preference”) is a legal term arising in bankruptcy law where a person or company transfers assets or pays a debt to a creditor shortly before going into bankruptcy, that payment or transfer can be set aside on the application of the liquidator or trustee in bankruptcy as an unfair …
What is a contemporaneous exchange?
Contemporaneous exchange is when products, goods or services are provided to a debtor in exchange for payment from the debtor for those services. Creditors who apply the payment received to antecedent debt risk the loss of the contemporaneous exchange defense.
What is the meaning of contemporaneous?
: existing, occurring, or originating during the same time social and political events that were contemporaneous with each other.
What is an antecedent debt?
antecedent debt. An antecedent debt is created when a creditor receives a right to. payment from the debtor for goods or services.12 Section 547(b)(2) of the. Bankruptcy Code requires that the party who is alleged to have received a preference. must have been owed a “debt” by the debtor, and the debtor must have owed …
What is antecedent debt under Hindu law?
“Antecedent” debt means antecedent in fact as well as in time. The debt must be independent of and not part of the transactions impeached. The debt may be a debt incurred In connection with a trade started by the father.
What do you mean by an antecedent or pre existing debt constitutes value?
Value, what constitutes. — Value is any consideration sufficient to support a simple contract. An antecedent or pre-existing debt constitutes value; and is deemed such whether the instrument is payable on demand or at a future time.
What are Avyavaharika debts?
Generally speaking, a debt is said to be “avyavaharika” when it is “repugnant to good morals”. The word avyavaharika does not cover merely those debts which are illegal or immoral, but also all debts which the Court regards as inequitable or unjust to make the son liable.
Who is a Coparcener?
According to the Hindu Succession Act, 1956, any individual born in a Hindu Undivided Family (HUF) becomes a coparcener by birth. Hence both sons and daughters qualify as coparceners in the family and share equal rights and liabilities over the property. After the 2005 amendment, daughters also became coparceners.
Is son responsible for father’s debt?
1. Son is ,liable to pay the debt of father to the limit he receive inheritance from the father. 2. No, mother is not liable to oay father debt from your gifted property.
What is immoral debt?
Immoral debts are those which are taken in furtherance of an immoral purpose such as for prostitution or for keeping of concubine. The father himself can alienate the joint family property property for the discharge of his personal debt and son can challenge it only if the debts are tainted.
What is a pious obligation?
‘Pious obligation’ means an obligation of a Hindu because of profound dedication to religion. Hindu law states that ‘He who having gotten a sum loaned or the like does not reimburse it to the proprietor will be conceived henceforth in his creditors house a slave, a servant or a lady or a quadruped ‘.
What is pious obligation?
Pious meaning religious, and under the doctrine of pious obligation, an expectation is casted on a son to repay his father’s loan and debts from the part of the ancestral property he holds under a religious duty towards his religion.
What are the rights of Coparceners?
Right of survivorship: All the coparceners of a joint Hindu family have a right of survivorship in respect of the joint family property. Thus, if one coparcener dies, his undivided interest in such family passes by survivorship to the remaining coparceners, and not to his heirs by succession.
Can a married daughter claim her father’s property?
According to the Hindu Succession (Amendment) Act 2005, daughters have the same right as sons to their father’s self-acquired property, if he dies intestate, that is, without a will. The marital status of the daughter has no bearing on her right to the property.
What is the difference between Karta and Coparcener?
karta is the head of joint hindu family(HUF) business. He is also the eldest person of the family. Coparcener are the member of HUF other than karta.
Who are Coparceners give an example?
Under the 1 lindu law, it has also been said that the male members upto three lineal descendants are coparceners meaning a family consisting of father, his son, son’s son and son’s grandson are coparceners in the Hindu property.
Can a female be a Karta?
The head of a HUF is called the Karta, he is the senior-most male member of the family. Until January 2016, a woman could not be the HUF Karta. But in a landmark case, the Delhi High Court ruled in favour of a female being the Karta of a HUF. However, the same has not been incorporated in the Income Tax Act as yet.
Are grandchildren Coparceners?
Their respective children and grandchildren (both male and female) would also, on birth, become coparceners and have a share in the HUF property. Therefore, in this case, the grandchildren will get an equal share in the property to which their branch is entitled; viz the share which their father is entitled to.
Can a female be a Coparcener?
In the first category are coparceners. Only males were recognised as coparceners of the HUF and all the females were called members. All the coparceners are members but vice-versa is not true.
Can a dad refuse to will property to his daughter?
Ancestral property is defined as one that is inherited up to four generations of male lineage and should have remained undivided throughout this period. So, by law, a father cannot will such property to anyone he wants to, or deprive a daughter of her share in it.
Who Cannot be a Karta?
2. Junior male member: In the presence of a senior male member, a junior male member cannot be the Karta. However, with the consent of all the coparceners, a junior male member can be appointed as a Karta.
Who are the legal heirs of ancestral property?
A daughter has equal share of right in the ancestral property. Besides this, in a situation where the father has a self- acquired property or a separate property and he dies intestate, then the daughter who is a Class I heir will have succession rights equal to her living mother, sister, grandmother and brother.