341 meeting problem:(

[denisey722]

So my husband and I just had our 341 meeting this past friday. the problem was, we had paid my mother back $3,000 when we received our income taxes this year. My mother had helped us out quiet a bit last year with trying to stay afloat. I had a garnishment for a vehicle that was repossesed due to my husband losing his job. the trustee did say he is going to demand that money back from my mother. My mother no longer has that money as she is the sole provider for her and her husband who is disable and unable to work. has anyone else ever had this happen? am I able to state that we will pay (payments of course) on my mothers behalf and still have our bankruptcy granted?

[LadyInTheRed]

The trustee has a right to any money you repay to an insider within 1 year of filing BK. Your mother is an insider. Technically, this is an issue between the trustee and your mother. But, the trustee may accept payments from you. If you have an attorney, talk to him about your options. If you don't have an attorney, ask the trustee if he will accept payments from you instead of pursuing your mother. If the trustee pursues your mother, there is nothing to prevent you from paying the money back to your mother as long as you use assets that are not part of the bankruptcy estate.

[AngelinaCat]

We had a similar issue. Your mother is an example of what is called a 'preferential insider'. Preferential, because you chose to pay her and nothing to your other creditors. Insider, because she is a relative or close friend. You would have been better off to wait until after discharge to pay her back.

In our case, we had to pay a lump sum. But you may be able to work a deal with the trustee to accept payments. Good luck.

[denisey722]

Thank you both

[AngelinaCat]

Please let us know when you learn what the situation will be. We may then be able to guide you further.

[denisey722]

I will, thank you.