Scribd Logo
Upload

Welcome to Scribd!

  • 589 views

    Concurrence and Preference of Credits

    Uploaded by

    Karen Sheila B. Mangusan - Degay
    Concurrence and Preference of Credits are defined. Preference of credits gives a creditor the right to be paid first out of a debtor's assets when there are insufficient funds. Preference applies to claims not attached to specific properties, unlike a lien which creates a charge on a particular property. There is a two-tier order of preference for credits - the first tier includes taxes/duties on a property, while the second tier satisfies other special preferred credits equally. Credits are classified as specified preferred (like mortgages), ordinary preferred (ordered by law), or common (no preference).

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Concurrence and Preference of Credits

    Uploaded by

    Karen Sheila B. Mangusan - Degay
    589 views1 page
    Concurrence and Preference of Credits are defined. Preference of credits gives a creditor the right to be paid first out of a debtor's assets when there are insufficient funds. Preference applies to claims not attached to specific properties, unlike a lien which creates a charge on a particular property. There is a two-tier order of preference for credits - the first tier includes taxes/duties on a property, while the second tier satisfies other special preferred credits equally. Credits are classified as specified preferred (like mortgages), ordinary preferred (ordered by law), or common (no preference).

    Original Description:

    credits

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Concurrence and Preference of Credits are defined. Preference of credits gives a creditor the right to be paid first out of a debtor's assets when there are insufficient funds. Preference applies to claims not attached to specific properties, unlike a lien which creates a charge on a particular property. There is a two-tier order of preference for credits - the first tier includes taxes/duties on a property, while the second tier satisfies other special preferred credits equally. Credits are classified as specified preferred (like mortgages), ordinary preferred (ordered by law), or common (no preference).

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    589 views1 page

    Concurrence and Preference of Credits

    Uploaded by

    Karen Sheila B. Mangusan - Degay
    Concurrence and Preference of Credits are defined. Preference of credits gives a creditor the right to be paid first out of a debtor's assets when there are insufficient funds. Preference applies to claims not attached to specific properties, unlike a lien which creates a charge on a particular property. There is a two-tier order of preference for credits - the first tier includes taxes/duties on a property, while the second tier satisfies other special preferred credits equally. Credits are classified as specified preferred (like mortgages), ordinary preferred (ordered by law), or common (no preference).

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Concurrence and Preference of Credits

    1. Define Concurrence of Credits


    This implies the possession by two or more creditors of equal rights or privileges over the same
    property or all of the property of the debtor.

    2. Define Preference of Credits


    This is the right held by the creditor to be preferred in the payment of his claim above the
    others out of the debtor’s assets. It is a right to be paid first

    3. When does the rule of preference apply?


    a) There are two or more creditors;
    b) With separate and distinct claims;
    c) Against the same debtor; and
    d) Who has insufficient property.

    4.-5. Preference of Credit versus Lien

    Preference of credit applies only to claims which do not attach to specific properties.
    Lien, on the other hand, creates a charge on a particular property.

    Lien shall refer to the statutory or contractual claim or judicial charge on real or personal
    property for payment of the claim or debt secured by such lien.

    6. What are the properties exempted from debtor’s liability in the fulfillment of his obligations?
    General Rule:
    Debtor is liable with all his property, present and future, for the fulfillment of his obligations.

    Exempted properties are the following:


    1. Present property
    2. Future property
    3. Property under legal custody and those owned by municipal corporations necessary for
    governmental purposes

    7.-8. Explain the two-tier order of preference of credit

    a. The first-tier includes only taxes, duties and fees due on a specific movable of immovable
    property.

    b. Second-tier- All other special preferred (non-tax) credits. These credits are to be satisfied pari
    passu (equally) and pro rata, out of any residual value of the specific property to which such other
    credits relate.

    9-10. Enumerate the classifications of credits and briefly explain


    a. Specified preferred credits
    i. Considered as mortgages or pledges or real or personal property or liens
    within the purview of legal provisions governing insolvency.
    ii. Taxes due to the State shall first be satisfied
    b. Ordinary preferred credits – preferred in the order given by law
    c. Common credits- Credits of any other kind or class, or by any other right or title not
    comprised under Art. 2241-2244 shall enjoy no preference.

    You might also like