---
title: O.C.G.A. § 11-4-216. Insolvency and preference.
collection: code
id: 11-4-216
cite_as: O.C.G.A. § 11-4-216 (2025)
canonical_url: https://georgiacommons.org/code/11-4-216
md_url: https://georgiacommons.org/code/11-4-216.md
text_url: https://georgiacommons.org/code/11-4-216/text
source_url: https://www.legis.ga.gov/api/document/docs/default-source/joint-features-document-library/t11-(v9)-2022-pdf.pdf?sfvrsn=b5451bbd_0#page=514
date: 2025
status: active
corpus_version: 2025-supplement-89aa39ab3c68
license: CC0-1.0
publisher: Georgia Commons, an independent project of Georgia Civic Data. Not the State of Georgia. Not legal advice.
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version: the only printed version
in_force: true
current_through: Including Acts of the 2025 Regular Session of the General Assembly
heading_path: "COMMERCIAL CODE / BANK DEPOSITS AND COLLECTIONS / COLLECTION OF ITEMS: DEPOSITARY AND COLLECTING BANKS"
---

# O.C.G.A. § 11-4-216. Insolvency and preference.

(a) If an item is in or comes into the possession of a payor or collecting bank that suspends payment and the item has not been finally paid, the item must be returned by the receiver, trustee, or agent in charge of the closed bank to the presenting bank or the closed bank’s customer.

(b) If a payor bank finally pays an item and suspends payments without making a settlement for the item with its customer or the presenting bank which settlement is or becomes final, the owner of the item has a preferred claim against the payor bank.

(c) If a payor bank gives or a collecting bank gives or receives a provisional settlement for an item and thereafter suspends payments, the suspension does not prevent or interfere with the settlement’s becoming final if the finality occurs automatically upon the lapse of certain time or the happening of certain events.

(d) If a collecting bank receives from subsequent parties settlement for an item, which settlement is or becomes final and the bank suspends payments without making a settlement for the item with its customer which settlement is or becomes final, the owner of the item has a preferred claim against the collecting bank.

## History

Code 1933, § 109A-4-214, enacted by Ga. L. 1962, p. 156, § 1; Code 1981, § 11-4-216, as redesignated by Ga. L. 1996, p. 1306, § 11.

## Cross References

Order of payment of liabilities of financial institution which is liquidated or dissolved and the assets of which are insufficient to pay in full its liabilities, § 7-1-202.

## Editor's Notes

Ga. L. 1996, p. 1306, § 11, effective July 1, 1996, renumbered former Code Section 11-4-214 as Code Section 11-4-216.