If I paid over $600 to any one creditor, 90 days prior

[tg16]

to my filing, would that excess over the $600 be clawed back and paid to my priority unsecured claim, in my case, my IRS back taxes when in an installment agreement?

[justbroke]

As you pointed out, the IRS is a special creditor. If the payments were to the IRS it would be unlikely that it would be clawed back. This means that the IRS is paid back before all other unsecured creditors (except in certain cases where the IRS debt is actually dischargeable/non-priority).

Generally, the Trustee can claw back what are known as preferences. It's up to the Trustee to determine whether it's a preference and whether or not it is worth them clawing the money back. As for this specific case, of a "general" unsecured creditor, it will be the Trustee's opinion on this. I don't believe it's the excess, but it could be the entire amount.

[tg16]

That's interesting and thanks. Would be nice if all the payments to the "general" creditors for the last 90 days were clawed back and sent to the "priority" creditor, the IRS. That would certainly help me as these past taxes do not fall within the guidelines of being erased..

[justbroke]

It would be nice, but the Trustee's authority only comes about if it were a preference. If you were making "regular" minimum payments to creditors, those payments would not be preferences. If you treated one creditor better than the others, then the preference would be more clearcut. In most cases, preferences come about because a debtor pays back family, friends, or business associates first as an insider preference. I have not read of many preferences (in indivudal debtor cases) where the preference was to an ordinary creditor such as a bank. Payments to secured debt are not preferences.

[tg16]

I understand. Thanks