Preferential Payment-Please HELP!

[Willy13]

Since you paid out of a joint account you should be ok, I think

It's that uncertainty, even with lawyers, that stinks.

[lalap123]

Okiemom,
Did you mention this already - how the trustee found out about the payment? Mine was done in February, so hopefully by September he/she won't ask for anything past 6 months of bank statements and it won't even come up. Was it something you put on your schedules? Sorry if you've already said this...

[Willy13]

The payment is not a preference. A preference involves the payment to a "creditor." The term "creditor" is defined as a creditor of the debtor.

In this case, if that money was repaid directly to the OP's mother instead of to the credit card, would it then have been a preference or is it more complicated than that? By that I mean does it need some kind of signed paperwork or business arrangement before it can be considered a legitimate preference?

This topic is enough to drive someone crazy.

[StartingOver08]

Okiemom,
Did you mention this already - how the trustee found out about the payment? Mine was done in February, so hopefully by September he/she won't ask for anything past 6 months of bank statements and it won't even come up. Was it something you put on your schedules? Sorry if you've already said this...

Lalap, you are walking down a dangerous slope if you believe that the Trustee is limited in anyway as to how long they can look back. They USUALLY look back 6 months, but you are filling out the petition with all the information they need to look back further. That petition must be filled out truthfully because you sign it and the Trustee questions you under oath at the 341. The best thing is for you to download a copy of the actual petition so you know what questions will be asked and how long a period you need to document. I would just caution you that having an insider payment in month 7 is still within the one year lookback for insider payments.

Now, of course, if your payment is small - say $500 - then you should not be concerned.

[Goat]

I guess I'm going to try for the 3 year wait which I think is the lookback limit for my state.

Isn't the 1-year insider limit federally mandated?

Why would you have to wait 3 years?

If you wait at least a year you can disclose the payment and the trustee doesn't have the authority to undo it. Am I wrong?

[Willy13]

Isn't the 1-year insider limit federally mandated?

Why would you have to wait 3 years?

If you wait at least a year you can disclose the payment and the trustee doesn't have the authority to undo it. Am I wrong?

They can use state laws when it comes to Fraudulent Transfers. Most have 4 years under the Uniform Fraudulent Transfer Act. On some attorney's site for my state, I read somewhere that they may ask at the 341 for any transfers in the last 3 years. So I'm assuming that's how far back they may look.

[Goat]

They can use state laws when it comes to Fraudulent Transfers. Most have 4 years under the Uniform Fraudulent Transfer Act. On some attorney's site for my state, I read somewhere that they may ask at the 341 for any transfers in the last 3 years. So I'm assuming that's how far back they may look.

Jesus christ. My lawyer said something about 4 years as well.

Guess I'll just have to make myself collection-proof and forget about bk.

[BnkrptcyLwyr]

In this case, if that money was repaid directly to the OP's mother instead of to the credit card, would it then have been a preference or is it more complicated than that? By that I mean does it need some kind of signed paperwork or business arrangement before it can be considered a legitimate preference?

This topic is enough to drive someone crazy.

As I said, while it may not be a preference, that doesn't mean it's not a fraudulent transfer.

Different transfers of property can be recovered through various means. If you are trying to "legitimize" a transfer, you should probably reconsider the transfer.

And certainly, some actions can be taken, others cannot. If you are trying to get rid of your assets, or pay off family members first, or transfer property to family, etc. ... then its a good bet the transfer is voidable.

Better to talk to a good attorney and see what kind of legitimate planning can be done.

[eddiep]

This topic is enough to drive someone crazy.

Thank god for lawyers

[ready2puke]

Man this has got me thinking. Maybe this may sound stupid but I don't want to screw up my BK.. I hope I'm being paranoid here. Since I belong to Costco, I buy my Moms depends and pads. I pay for them and she pays me back. They are not cheap, usually almost 100. per pair. I usually go and buy them 4 of them at a time every other month. Thats approx. 180. or so..Did I screw up? Man I wish my mom wasn't old for many reasons...

[eddiep]

That is not a preferential payment. The money is going to costco not your mom and not a credit card. Have you been saving the reciepts?

[ready2puke]

No I haven't been saving them it just never occured to me to worry about her depends. But the money she gives me back ( to pay me back) goes into my bank account.

[VVV]

Do you guys know the look back period for the state of CA for Fraudulent Transfers?

[StartingOver08]

The lookback period is Federal, not State. The differences are in how each district handles their cases and possibly what "triggers" you have in your case to have a Trustee request more info. It appears that some triggers might be: 1) over median income; 2) large debt; 3) self employment of any type.....this is not cast in stone, but seems to be a factor.

Your attorney will know the specifics for your particular district and your trustee.

[lalap123]

Startingover08-
Thanks. One of the attorneys I met with for a free consult did say that based on what I told him I shouldn't have a problem b/c the money came out off a joint checking account. I'm not trying to avoid the trustee finding out about it, but I'm hoping that I don't have to mention it on the paperwork b/c it really wasn't a transfer or preferential payment (according to the attorney...it was simply a payment to my husband's credit card that was done around the same time as I made a large deposit into our account from an old pension plan I had). He seemed to think that it could be argued that way at least.

BTW, could you let me know where I can find the paperwork (petition?) that everyone keeps talking about? I'm in Georgia, in case that matters...