Preferential Transfer Question

[Banker81]

Ok I have sort of a strange situation. First let me explain how all of this started. I decided to move into a house my grandma owned about 2 years ago. The house needed alot of work so we dumped about 80k into it thinking we could turn around and get some equity out of it to pay off the balance. Well we all know what happens from here. We are stuck in a rut. I havent been paying rent since we've been here because we were making the credit card payments. The mortgage (in my grandmas name) got behind about 4 months. I have the cash to pay the loan current so the house doesnt foreclose and now we will start paying the 800 in rent to cover the payment. We can do this because we stopped paying our credit cards this month. Will they look at this as a preferential transfer? If we dont pay it we won't have a house. If I wait 90 days to file will that solve the problem?

Also how will they look at the rent payment for the means test? Since I have just now started paying it.

[AngelinaCat]

If you do this, you really need to wait at least 180 days, or six months to file. Filing any closer to this rent payment of $3,200, which you need to do in order to bring things up to date runs the risk of piquing the trustee's interest. You don't want to do that.

On the rent payment and means test, again I think you need to let six months pass and then look at the picture.

Good luck to you!

[Tbornetun]

If you are catching up on back rent payments to keep your housing, I don't beleive this would be preferential. It would be the same as catching up on mortgage payments before filing. You need a place to live. Maybe pay 2 months of payments at a time so it doesn't raise any flags, but even if it did, I think you would be fine. It is only preferential if you are paying a creditor more than the regular payment. You owe rent for the past 4 months, you are mearly catching that up, not preferential. It would be a different story if you for instance had an auto loan and paid it off early with a lump sum.

If you are caught up then you can use the full rent payment for the means test without any issue as well.

[fltoo]

If you do this, you really need to wait at least 180 days, or six months to file. Filing any closer to this rent payment of $3,200, which you need to do in order to bring things up to date runs the risk of piquing the trustee's interest. You don't want to do that.

On the rent payment and means test, again I think you need to let six months pass and then look at the picture.

Good luck to you!

Why 6 months? If it was a preferential payment, the look back is one year, but...
I agree with tborn, it is not preferential.

I would give grams the exact amount of back rent due and have her deposit it into her checking account. Then gram can pay her mortgage. Don't pay her mortgage directly. You are catching up on rent payments. I would also have a lease with gram if you don't already have one. Don't comingle your money with her and have her give you receipts on rent paid.

Your rent payment will be used on the means test.

[TEW]

If you are catching up on back rent payments to keep your housing, I don't beleive this would be preferential. It would be the same as catching up on mortgage payments before filing. You need a place to live. Maybe pay 2 months of payments at a time so it doesn't raise any flags, but even if it did, I think you would be fine. It is only preferential if you are paying a creditor more than the regular payment. You owe rent for the past 4 months, you are mearly catching that up, not preferential. It would be a different story if you for instance had an auto loan and paid it off early with a lump sum.

If you are caught up then you can use the full rent payment for the means test without any issue as well.

I agree this is not preferential payment BUT I would make sure this lease is well documented that it really is a lease