Section 547

Definition: Section 547 of the U.S. Bankruptcy Code governs “preferences,” which are certain payments or transfers made by a debtor to a creditor shortly before filing for bankruptcy that may unfairly favor one creditor over others. This section allows the bankruptcy trustee to recover (or “avoid”) such preferential transfers to ensure equal treatment among all creditors.

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Section 547 (Preference Actions)

Section 547: trustee recovers preferential transfers. 90 days (1 year for insiders). Elements: debtor’s property, to creditor, for antecedent debt, while insolvent (presumed 90 days), receiving more than Ch. 7. Defenses: contemporaneous exchange, ordinary course, subsequent new value, and PMSI (perfected 30 days). FL: vendors, banks, landlords, and professionals may face claims. Document ordinary course patterns.

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Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC

Disclaimer: The information and opinions provided are for general educational, informational or entertainment purposes only and should not be construed as legal advice or a substitute for consultation with a qualified attorney. Any information that you read does not create an attorney-client relationship with Barnes Walker, Goethe, Shea & Robinson, PLLC, or any of its attorneys. Because laws, regulations, and court interpretations may change over time, the definitions and explanations provided here may not reflect the most current legal standards. The application of law varies depending on your particular facts and jurisdiction. For advice regarding your specific situation, please contact one of our Florida attorneys for personalized guidance.

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