​KembaraXtra – Legal Terms – Marshalling of Assets


Marshalling of assets is an equitable principle used to achieve fairness between creditors who have claims against different funds belonging to the same debtor.


The doctrine applies where one creditor can claim against two separate assets while another creditor can claim against only one of them. Equity may require the first creditor to seek repayment from the alternative asset whenever possible.


The purpose of the rule is to maximize the chances that all creditors will receive payment without unfairly exhausting the only fund available to another creditor.


Marshalling therefore operates as a mechanism for balancing competing claims and preventing unjust disadvantage among creditors.