Preferential Creditor

A creditor(s) with special rights who is paid ahead of unsecured creditors. The best example of this would be employees, who rank ahead of unsecured creditors for arrears of pay, accrued holiday pay and pension contributions in certain circumstances. Many people think HM Revenue & Customs have this elevated status, but this was lost on 15 September 2003 when they became non-preferential creditors.