11 U.S.C. § 547 : US Code - Section 547: Preferences

Search 11 U.S.C. § 547 : US Code - Section 547: Preferences

(a) In this section -
(1) "inventory" means personal property leased or furnished,
held for sale or lease, or to be furnished under a contract for
service, raw materials, work in process, or materials used or
consumed in a business, including farm products such as crops or
livestock, held for sale or lease;
(2) "new value" means money or money's worth in goods,
services, or new credit, or release by a transferee of property
previously transferred to such transferee in a transaction that
is neither void nor voidable by the debtor or the trustee under
any applicable law, including proceeds of such property, but does
not include an obligation substituted for an existing obligation;
(3) "receivable" means right to payment, whether or not such
right has been earned by performance; and
(4) a debt for a tax is incurred on the day when such tax is
last payable without penalty, including any extension.
(b) Except as provided in subsections (c) and (i) of this
section, the trustee may avoid any transfer of an interest of the
debtor in property -
(1) to or for the benefit of a creditor;
(2) for or on account of an antecedent debt owed by the debtor
before such transfer was made;
(3) made while the debtor was insolvent;
(4) made -
(A) on or within 90 days before the date of the filing of the
petition; or
(B) between ninety days and one year before the date of the
filing of the petition, if such creditor at the time of such
transfer was an insider; and
(5) that enables such creditor to receive more than such
creditor would receive if -
(A) the case were a case under chapter 7 of this title;
(B) the transfer had not been made; and
(C) such creditor received payment of such debt to the extent
provided by the provisions of this title.
(c) The trustee may not avoid under this section a transfer -
(1) to the extent that such transfer was -
(A) intended by the debtor and the creditor to or for whose
benefit such transfer was made to be a contemporaneous exchange
for new value given to the debtor; and
(B) in fact a substantially contemporaneous exchange;
(2) to the extent that such transfer was in payment of a debt
incurred by the debtor in the ordinary course of business or
financial affairs of the debtor and the transferee, and such
transfer was -
(A) made in the ordinary course of business or financial
affairs of the debtor and the transferee; or
(B) made according to ordinary business terms;
(3) that creates a security interest in property acquired by
the debtor -
(A) to the extent such security interest secures new value
that was -
(i) given at or after the signing of a security agreement
that contains a description of such property as collateral;
(ii) given by or on behalf of the secured party under such
agreement;
(iii) given to enable the debtor to acquire such property;
and
(iv) in fact used by the debtor to acquire such property;
and
(B) that is perfected on or before 30 days after the debtor
receives possession of such property;
(4) to or for the benefit of a creditor, to the extent that,
after such transfer, such creditor gave new value to or for the
benefit of the debtor -
(A) not secured by an otherwise unavoidable security
interest; and
(B) on account of which new value the debtor did not make an
otherwise unavoidable transfer to or for the benefit of such
creditor;
(5) that creates a perfected security interest in inventory or
a receivable or the proceeds of either, except to the extent that
the aggregate of all such transfers to the transferee caused a
reduction, as of the date of the filing of the petition and to
the prejudice of other creditors holding unsecured claims, of any
amount by which the debt secured by such security interest
exceeded the value of all security interests for such debt on the
later of -
(A)(i) with respect to a transfer to which subsection
(b)(4)(A) of this section applies, 90 days before the date of
the filing of the petition; or
(ii) with respect to a transfer to which subsection (b)(4)(B)
of this section applies, one year before the date of the filing
of the petition; or
(B) the date on which new value was first given under the
security agreement creating such security interest;
(6) that is the fixing of a statutory lien that is not
avoidable under section 545 of this title;
(7) to the extent such transfer was a bona fide payment of a
debt for a domestic support obligation;
(8) if, in a case filed by an individual debtor whose debts are
primarily consumer debts, the aggregate value of all property
that constitutes or is affected by such transfer is less than
$600; or
(9) if, in a case filed by a debtor whose debts are not
primarily consumer debts, the aggregate value of all property
that constitutes or is affected by such transfer is less than
$5,000.
(d) The trustee may avoid a transfer of an interest in property
of the debtor transferred to or for the benefit of a surety to
secure reimbursement of such a surety that furnished a bond or
other obligation to dissolve a judicial lien that would have been
avoidable by the trustee under subsection (b) of this section. The
liability of such surety under such bond or obligation shall be
discharged to the extent of the value of such property recovered by
the trustee or the amount paid to the trustee.
(e)(1) For the purposes of this section -
(A) a transfer of real property other than fixtures, but
including the interest of a seller or purchaser under a contract
for the sale of real property, is perfected when a bona fide
purchaser of such property from the debtor against whom
applicable law permits such transfer to be perfected cannot
acquire an interest that is superior to the interest of the
transferee; and
(B) a transfer of a fixture or property other than real
property is perfected when a creditor on a simple contract cannot
acquire a judicial lien that is superior to the interest of the
transferee.
(2) For the purposes of this section, except as provided in
paragraph (3) of this subsection, a transfer is made -
(A) at the time such transfer takes effect between the
transferor and the transferee, if such transfer is perfected at,
or within 30 days after, such time, except as provided in
subsection (c)(3)(B);
(B) at the time such transfer is perfected, if such transfer is
perfected after such 30 days; or
(C) immediately before the date of the filing of the petition,
if such transfer is not perfected at the later of -
(i) the commencement of the case; or
(ii) 30 days after such transfer takes effect between the
transferor and the transferee.
(3) For the purposes of this section, a transfer is not made
until the debtor has acquired rights in the property transferred.
(f) For the purposes of this section, the debtor is presumed to
have been insolvent on and during the 90 days immediately preceding
the date of the filing of the petition.
(g) For the purposes of this section, the trustee has the burden
of proving the avoidability of a transfer under subsection (b) of
this section, and the creditor or party in interest against whom
recovery or avoidance is sought has the burden of proving the
nonavoidability of a transfer under subsection (c) of this section.
(h) The trustee may not avoid a transfer if such transfer was
made as a part of an alternative repayment schedule between the
debtor and any creditor of the debtor created by an approved
nonprofit budget and credit counseling agency.
(i) If the trustee avoids under subsection (b) a transfer made
between 90 days and 1 year before the date of the filing of the
petition, by the debtor to an entity that is not an insider for the
benefit of a creditor that is an insider, such transfer shall be
considered to be avoided under this section only with respect to
the creditor that is an insider.