Preferential payment on joint card? Help!

[emmacat]

Hi There,
I've met with a few attorneys and I'm concerned about "preferential payment" or even being accused of fraud.

I had a joint credit card with my father through our credit union (he was the co-signer). The balance was $2500. I did not want him to know I was filing bk, so the first attorney advised me to have my fiance pay off that joint card and close the account, which I did. I have copies of the check my fiance wrote to the credit card. It was paid and closed on 12/5/08. It no longer shows up on my credit report as an open account.

The 1st attorney said I could file as soon as it showed up as closed on my credit report. What about preferential payments? Could I be accused of this and the money retrieved even though technically I didn't make the payment?

So then I thought if I waited 90 days and filed on 3/5/09, I'd be safe, but is this considered an "insider" payment because it's family, which the statute of limitation is 1 year?

My current attorney said the "trustee won't go after that small of an amount" (I'm filing in Los Angeles) and doesn't seem concerned at all. She said we don't even have to list it. My questions are:

1. Should I listen to/trust my attorney and file now (before the 90 days are up)?

2. Wait and file at 90 days? (I can't afford to wait a year to be totally in the clear)

3. If the trustee did decide to retrieve that payment because it's considered preferential, what's the worst that could happen?

4. Worst case scenario- could I be accused of fraud, have my case denied, or would they just retrieve the $2500 payment? (remember I did not pay this, fiance did and I have bank statements & copy of his check to prove it)

Any advice much appreciated. Just a note, my first attorney, I believe, was fishing for ways to make my case more complicated and get more money. He was a big wig. That's why I'm having second thoughts about trusting the advice he gave me. He was asking what my father and fiance did for a living.

[2Bshinyandnew]

Hi There,
I've met with a few attorneys and I'm concerned about "preferential payment" or even being accused of fraud.

I had a joint credit card with my father through our credit union (he was the co-signer). The balance was $2500. I did not want him to know I was filing bk, so the first attorney advised me to have my fiance pay off that joint card and close the account, which I did. I have copies of the check my fiance wrote to the credit card. It was paid and closed on 12/5/08. It no longer shows up on my credit report as an open account.

The 1st attorney said I could file as soon as it showed up as closed on my credit report. What about preferential payments? Could I be accused of this and the money retrieved even though technically I didn't make the payment?

So then I thought if I waited 90 days and filed on 3/5/09, I'd be safe, but is this considered an "insider" payment because it's family, which the statute of limitation is 1 year?

My current attorney said the "trustee won't go after that small of an amount" (I'm filing in Los Angeles) and doesn't seem concerned at all. She said we don't even have to list it. My questions are:

1. Should I listen to/trust my attorney and file now (before the 90 days are up)?

If you can wait the 90 days, I would.

2. Wait and file at 90 days? (I can't afford to wait a year to be totally in the clear)

Yes

3. If the trustee did decide to retrieve that payment because it's considered preferential, what's the worst that could happen?

Preferential payments are a creditor problem, not a debtor problem. You would likely not be affected at all. See below

4. Worst case scenario- could I be accused of fraud, have my case denied, or would they just retrieve the $2500 payment? (remember I did not pay this, fiance did and I have bank statements & copy of his check to prove it)

The latter is probably worst case...even if you paid it and not fiance.

Any advice much appreciated. Just a note, my first attorney, I believe, was fishing for ways to make my case more complicated and get more money. He was a big wig. That's why I'm having second thoughts about trusting the advice he gave me. He was asking what my father and fiance did for a living.

see: http://www.moranlaw.net/preferences.htm

"It is neither wrong (under California law) of the debtor to make a preferential payment nor wrong of a creditor to accept it . The preference statutes are simply an attempt to achieve equity between creditors. Creditors are almost always better off attempting to get payment of their claims from their debtors and dealing with any efforts to recover the money when, and if, such attempts are made in bankruptcy."

[magyar123]

Ultimately - YOU did not make the payment - your fiance did. For it to be considered a preferential payment you would have to have the payment yourself.
The only issue I see arising would be that you have to make your fiance a creditor when you file - if a nosy trustee pulls your credit reports and sees that someone other than you paid off that credit card.

[keepmine]

Just to be a little cautious, I'd wait the 90 plus days to avoid any sort of preference issue.
But, it's not illegal for someone to pay a bill for you.

[nervousss]

They might assume your father didn't want to have any park in your bk, and paid it off and closed it himself? That seems logical.