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.

preferred creditor

Those creditors who, pursuant to Section 136 of the Bankruptcy and insolvency Act, rank ahead of ordinary unsecured creditors. Preferred creditors include employees for wages and landlords for rent (Ontario Bankruptcy Dictionary)

United Glossary of Bankruptcy Terms2012.