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 to the extent it was intended to be and in fact was a substantially contemporaneous exchange for
new value given to the debtor (11 USC 547(c)(1)).

 to the extent that the transfer was a payment of debt incurred in the ordinary course and was
made in the ordinary course of business and according to ordinary business terms (11 USC
547(c)(2)).

 that creates a security interest in a property in order to obtain a loan whose proceeds were used to
acquire such property (11 USC 547(c)(3)).

 that is to or for the benefit of a creditor, to the extent that after such transfer the creditor gave
new value to or for the benefit of the debtor (11 USC 547(c)(4)).

 that creates a continuing perfected security interest in inventory or receivables (or proceeds
therefrom) (that is, floating liens) except to the extent the creditor’s position is improved during
the 90 days preceding the date of the petition (1 year preceding the date of the petition for credi-
tors who are insiders) ((11 USC 547(c)(5)).

 that fixes a statutory lien that is not avoidable under 11 USC 545 ((11 USC 547(c)(6)).

 to the extent the transfer was a bona fide payment of a debt for alimony, maintenance, or other
domestic support ((11 USC 547(c)(7)).

 if, in the case of an individual debtor who has primarily consumer debts, the aggregate value of
the transfer was less than $600 ((11 USC 547(c)(8)).

 if, in the case of a debtor whose debts are not primarily consumer debts, the aggregate value of
the transfer was less than $5,000 ((11 USC 547(c)(9)).

11 USC 547(i) also restricts avoidance of transfers between 90 days and 1 year before the filing of the
petition made to an entity that is not an insider for the benefit of a creditor that is an insider. Such trans-
fers are considered to be avoidable only with respect to the creditor that is an insider, not the noninsider
creditor. This provision addresses the distinction that the reach back period for preferential transfers ex-
tends to 90 days from the petition date for a noninsider creditor, but up to 1 year from the petition date
for insiders. An example of a transfer made to a noninsider that benefits an insider occurs when an in-
sider guarantees a credit obligation to a noninsider. Thus the transfer to the noninsider in satisfaction of
that obligation creates a benefit to the insider who has reduced exposure on the guaranty.

Four of the safe harbors identified in 11 USC 547(c) (and in previous passages) form the most common
defenses to preference claims in commercial bankruptcy and are as follows:

1. The transfer was intended by the debtor and the creditor to be and was in fact a substantially con-
temporaneous exchange for new value.

2. The transfer was in payment of a debt incurred by the debtor in the ordinary course of business
and such transfer was made in the ordinary course of business of the debtor and the creditor or
according to ordinary business terms.

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