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What are preferential payments in bankruptcy?


In bankruptcy, a preferential payment is a payment made to one creditor that gives that creditor a better status than other creditors. Preferential payments can be made in the form of cash, property, or services.


Preferential payments are often made before a bankruptcy filing, but they can also be made during the bankruptcy process. If a preferential payment is made within 90 days of the bankruptcy filing, it may be considered voidable by the court. This means that the payment may be reversed, and the debtor may have to repay the money to the trustee.


Preferential payments can create problems for both debtors and creditors. For debtors, they can increase the amount of money owed to creditors. For creditors, they can create unfair treatment among different groups of creditors.




The Law Offices of Omar Zambrano has helped thousands of people and businesses in the past to get out of debt and start over.



Our goal is it to help you find a fresh start FAST!


Schedule your free consultation today! By Calling 626-338-5505 or visiting us at 12738 Ramona Blvd Baldwin Park CA 91706






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