jingle rule

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Under common law, in determining the extent to which partnership creditors whose debts are not fully satisfied by partnership property can assert claims to the assets of individual partners, the jingle rule gave partnership creditors priority in all partnership assets and assigned first priority to the separate creditors of individual partners in the individual assets of those partners. This approach was later abolished under the Revised Uniform Partnership Act and the Bankruptcy Code. Now in bankruptcy, partnership creditors and partners’ individual creditors both proportionally share in partners’ estates.

[Last updated in June of 2023 by the Wex Definitions Team]