Legal Definitions - nova debita

Definition: Nova debita (noh-vuh deb-i-tuh) is a Latin term used in Scots law to refer to new debts that are distinct from preexisting ones.

For example, if a debtor grants a security within sixty days of their bankruptcy for a debt that was contracted before that period, it is considered a fraudulent preference and can be reduced. However, if the security or payment is granted in consideration of a novum debitum (a debt presently contracted), it is not reducible even if granted within the sixty days.

Here's an example to help illustrate the definition: Let's say John owes $500 to his friend Bob, and he also owes $300 to his neighbor Sarah. If John grants a security to Bob within sixty days of his bankruptcy for the $500 debt, it would be considered a fraudulent preference and can be reduced. However, if John grants a security to Bob for a new debt of $200 that he owes him presently, it would not be reducible even if granted within the sixty days.