Text of the provision
Art. 2250. The excess, if any, after the payment of the credits which enjoy preference with respect to specific property, real or personal, shall be added to the free property which the debtor may have, for the payment of the other credits.
(1928a)
Civil Code of the Philippines, Republic Act No. 386, approved June 18, 1949, effective August 30, 1950. Reproduced in full; verified verbatim against the LawPhil and ChanRobles official-text renderings.
What this article means
The excess remaining after the preferred credits are paid is added to the free property the debtor may have, for the payment of the other credits.
Free property is whatever the insolvent debtor owns that is not already tied up satisfying a preference on a specific movable or immovable. Once those specific preferences have been paid off from the property they attach to, this article makes sure nothing is left stranded: any leftover value simply gets folded into the general pool of free property, from which the remaining, unpreferred creditors are then paid under the rules that follow.
Questions about this provision
- After the preferred creditors are paid out of specific property, what happens to any leftover value?
- After paying the preferred creditors on a specific piece of property there is still money left over — where does that surplus go among the remaining creditors?
Related provisions
- Article 2249 — Two or More Credits on the Same Immovable.
- Article 2251 — Payment of the Remaining Credits.
Cases interpreting this article
- Authorities on this article will be added here as each is verified against primary sources.