preferential transfer

A preferential transfer occurs when a debtor pays a specific creditor more than they owe, or transfers assets in a way that favors that creditor over others, shortly before declaring bankruptcy. This can disadvantage other creditors who were owed money earlier. Laws often allow bankruptcy courts to recover these payments or transfers to ensure fair treatment of all creditors. Essentially, it's about preventing a debtor from unfairly choosing certain creditors to get paid ahead of others when facing financial trouble.