When a customer files for bankruptcy, trade creditors often face unexpected legal exposure: the threat of preference actions under Section 547 of the U.S. Bankruptcy Code. These actions allow a debtor or bankruptcy trustee to claw back payments made within 90 days before the filing—even when the creditor did nothing wrong.
Defending a preference claim requires hiring counsel, producing documents, and negotiating settlements, often at significant cost. 547 Solutions offers a simple, efficient alternative: Preference Indemnity—a one-time-fee service that removes the burden, expense, and distraction of preference litigation entirely.

Understanding the Legal Landscape

What Is a Preference Claim?

Under 11 U.S.C. § 547, a bankruptcy trustee (or debtor-in-possession) may avoid any transfer of money or property made:

• To or for the benefit of a creditor
• For an existing debt
• Within 90 days before the bankruptcy filing (or one year if to an insider)
• While the debtor was insolvent
• That allows the creditor to receive more than it would in a Chapter 7 liquidation

If these conditions are met, the trustee can demand repayment of the amount received—regardless of whether the creditor acted in good faith or provided full value in return.

The Harsh Reality for Vendors

In practice, preference laws often punish the very vendors that supported the debtor during its decline. Even if a supplier’s transactions were routine, it may still receive a demand letter threatening litigation for thousands or even millions of dollars.

Defending these claims typically involves:

• Hiring specialized bankruptcy counsel and attorney
• Negotiating settlements that rarely favor the creditor
• The result: months of distraction, legal bills that can exceed the amount at stake, and frustration over a process that feels fundamentally unfair.
• Producing extensive payment and delivery documentation
• Analyzing complex defenses

The result: months of distraction, legal bills that can exceed the amount at stake, and frustration over a process that feels fundamentally unfair

The 547 Solutions Approach

A One-Time Payment for Complete Protection

547 Solutions was created to eliminate the pain points of preference litigation. For a single, all-inclusive fee, we take full responsibility for managing and resolving the preference claim—no matter how long it takes or how much it costs.
Our process is simple:

1. Information Gathering– You provide your payment history and complete a short business-practices questionnaire.
2. Quote and Coverage– We analyze your data and issue a one-time payment quote for complete indemnity coverage.
3. We Handle Everything– Once you accept, we handle all legal correspondence, settlement negotiations, and payments. You owe nothing more—ever.
   How It Works

How It Works

• No hourly billing – You never hire counsel or pay ongoing legal fees.
• No uncertainty – You know your total cost up front.
• No distraction – Your team stays focused on your business while we manage the claim.
• No risk – We pay whatever it takes to resolve the matter.

Why Preference Indemnity Matters

Even with strong legal defenses, preference actions drain time, resources, and energy from your organization. The typical trade creditor has little appetite—or budget—for prolonged bankruptcy litigation.

Preference Indemnity turns an unpredictable legal exposure into a fixed, manageable cost, freeing you to stay focused on operations, cash flow, and customers.

By partnering with 547 Solutions, you:

• Gain certainty in place of risk,
• Eliminate costly litigation and legal oversight, and
• Demonstrate a proactive, business-minded approach to credit risk management.
  

A Practical Solution to an Unfair Burden

Section 547 was intended to promote equality among creditors, but in reality it often penalizes vendors who kept supplying a struggling customer. 547 Solutions’ Preference Indemnity provides an efficient alternative—a one-time payment for total peace of mind.

When preference demands appear, you can either spend time and money fighting them—or you can transfer the entire problem to professionals who do nothing but resolve them.