Preferred Creditor
Definition of 'Preferred Creditor'An individual or organization that has priority in being paid the money it is owed if the debtor declares bankruptcy. Because bankrupt entities do not have enough money to fulfill all of their financial obligations, some investors that are owed money will get paid in part or not at all. A preferred creditor has a first claim to any funds that are available from the debtor. |
|
Investopedia explains 'Preferred Creditor'In bankruptcy cases, types of creditors that are preferred are defined by law and commonly include preferred bond holders and sometimes tax authorities. A preferred creditor can also be an economic development institution, such as the World Bank, that has priority in being repaid a loan it has made to a country in the event the country experiences a financial crisis. |
Related Definitions
Articles Of Interest
-
Debt Consolidation Made Easy
These five steps can help get you out of debt faster and easier than you'd ever imagined. -
Declaring Bankruptcy Is No Easy Out
Going bankrupt can help pull you out of debt, but it's rarely the best option. -
Life After Bankruptcy
Find out what you have to look forward to after filing for Chapter 7 or 13. -
An Overview Of Corporate Bankruptcy
If a company files for bankruptcy, stockholders have the most to lose. Find out why. -
Bankruptcy Protection For Your Accounts
Will the plan assets you've worked hard for be safe if you experience a personal financial crisis? -
What You Need To Know About Bankruptcy
Don't choose this last-resort option until you learn how it will affect your future. -
Changing The Face Of Bankruptcy
A 2005 law attempts to unmask fraudulent debtors and still save those who are struggling. Will it affect you? -
5 ETFs Flaws You Shouldn't Overlook
Despite their popularity, exchange traded funds have some drawbacks that investors should know about. -
Using The Price-To-Book Ratio To Evaluate Companies
The P/B ratio can be an easy way to determine a company's value, but it isn't magic! -
Liquidity Vs. Solvency
Learn about the differences between these two words and how each one is used in the stock market.
Free Annual Reports