Can a trustee recover a payment a debtor made to a creditor shortly before filing bankruptcy?
A trustee may avoid a preferential transfer under 11 U.S.C. § 547(b) when a debtor pays an existing creditor on an antecedent debt within the 90 days before filing, to the extent it gives that creditor more than a Chapter 7 distribution.
The answer
The five elements of a preference
11 U.S.C. § 547(b) lets the trustee avoid a transfer of an interest of the debtor in property that was (1) to or for the benefit of a creditor, (2) for or on account of an antecedent debt, (3) made while the debtor was insolvent, (4) made on or within 90 days before the petition date (or one year for insiders), and (5) that enabled the creditor to receive more than it would in a Chapter 7 liquidation.
Why the power exists
The preference power enforces the equality-of-distribution principle. It discourages creditors from racing to dismember a failing debtor and claws back last-minute payments so that similarly situated creditors share ratably.
The judged input
What the AI drafted
Submitted to the judgeThis is an excerpt from a draft restructuring strategy memo — the kind of work product a lawyer generates with a legal-AI drafting tool, then has to stand behind. Kingsfield does not write it; it rules on the citations the model put in it. This draft cites two authorities; one of them is wrong.
The judge ruled on every citation as the draft used it — it accepted 11 U.S.C. § 547(b) and rejected 11 U.S.C. § 548. Here is why.
The verdict
How Kingsfield ruled
Ruled 2026-06-23Each citation in the draft above was submitted to the Kingsfield judge and ruled against the primary-law corpus — Accept, Reject, or Inconclusive, per citation. These are live verdicts, not editorial. Each card shows the claim the draft made and the verbatim authority the verdict was rendered against.
The draft claimed: The trustee may avoid a transfer of an interest of the debtor in property made to or for the benefit of a creditor, for or on account of an antecedent debt, made while the debtor was insolvent, on or within 90 days before the petition, that enables the creditor to receive more than it would receive in a Chapter 7 case.
“§ 547(b) Except as provided in subsections (c) and (i) of this section, the trustee may, based on reasonable due diligence in the circumstances of the case and taking into account a party’s known or reasonably knowable affirmative defenses under subsection (c), avoid any transfer of an interest of the debtor in property—”
Cite found; proposition supported by the cited text.
The draft claimed: Section 548 sets the 90-day reachback under which a trustee may avoid a preferential transfer made to a creditor on account of an antecedent debt while the debtor was insolvent.
Cite found, but the cited text does not support the claim. 11 U.S.C. 548 governs avoidance of fraudulent transfers made for less than reasonably equivalent value or with intent to hinder creditors, with a two-year reachback; the preference power with the 90-day reachback is at 11 U.S.C. 547(b). Regenerate with the correct authority.
Run your own work through the judge
Kingsfield rules on every citation, quote, and proposition your AI produces, against the primary law we cover. Accept, Reject, or Inconclusive, per citation, with a signed Audit Capsule.
Connect the Judge See the architectureThis page is legal information, not legal advice, and does not create an attorney-client relationship. The draft shown is an illustration of a typical AI answer; verdicts reflect the cited authority in the Kingsfield corpus as of the ruling date shown above.