What happens if someone says that they’ve received a claim that’s preferential?

Minneapolis Bankruptcy attorney Steven Silton discusses preferential claims.

Contact Steven Silton

Email: [email protected]

Phone: (612) 260-9003


It’s very important if you’ve received a notice of a preference payment or if somebody is commenced an action in bankruptcy court, in federal court for return of a preference you consult with an attorney prior to paying that back. There are a number of defenses to preferences, very, very valid defenses, and they include that there’s a contemporaneous exchange for new value which means you provided additional accommodations to the debtor, or what’s called ordinary course, in other words, that this payment, although not in what would be considered standard customary payment terms are in the ordinary course of your business operation.

Oftentimes, I’ve seen in corporations or individuals simply receive the notice of claim or receive a complaint for the bankruptcy court, and say, “Oh, my gosh, it must be preferential,” and simply make a payment. However, those defenses often give valid defenses to those claims in a court, and it’s very important to assess the merit of those claims before you simply give up on them.