Legal Definition of earmarking doctrine
: a doctrine in bankruptcy law: a loan made by a third person to a debtor to enable the debtor to pay off a specified creditor cannot be avoided by the trustee as a preference since the debtor never actually had control of the funds and the transfer does not diminish the debtor's estate
Origin and Etymology of earmarking doctrine
probably so called because the loan has been earmarked, i.e., specifically designated, by the debtor to pay a specific creditor
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