What creditors need to know about preferential payments

"best Arizona law firm"As a creditor, the last thing you want to receive is a notice from the bankruptcy court stating that the debtor that owes you money has filed a case!  It is even worse if you also receive a letter from the bankruptcy trustee demanding that you return the money that the debtor paid you within the 90 days preceeding the bankruptcy filing.  If this happens to you, contact the attorneys at Windtberg & Zdancewicz, PLC, to get help.

The Bankruptcy Code does not allow a debtor to make “preferential payments” or to prefer one creditor over another.  This means that the debtor cannot pay some creditors prior to filing for bankruptcy while not paying other similar creditors.  The law provides that certain payments made on a prior debt within 90 days before a bankruptcy filing (or within one year if you are a relative or insider of the debtor) are recoverable by the trustee UNLESS you have one of the many defenses available (which will be covered in a future blog).

If you are a creditor who has questions regarding your rights in a bankruptcy matter, please contact Windtberg & Zdancewicz, PLC, to discuss your options.  Additionally, if you are accepting payments from a client or customer who appears to be sliding into bankruptcy, you should contact our attorneys to discuss possible preventative steps to take to protect what has been paid to you.

If you are a creditor who needs advice regarding preferential payments or other bankruptcy related matters, contact

The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation.  We handle many types of business disputes on behalf of both creditors and debtors. Our attorneys handle cases from pre-litigation negotiations through litigation, obtaining and enforcing judgments to collect what our clients are owed.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance, or are interested in learning more, please contact us at (480) 584-5660.


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