Can I pay off some creditors that I believe may have non-dischargeable positions?

[swampwiz]

Going through my situation, I think that at most, I have about $47K in non-dischargeable debt, although as this money was put into the stock market, it could be reasoned that if I felt that it would appreciate at good rate (which indeed it did!), that it would not be considered as being taken out when I was insolvent (the key test for dischargeability.) I have about $3K in my checking account, and $30K in the market, and a joint account of $6K (which may or may not be considered as mine, or even half-mine.) So after paying my attorney a few $K, it looks like I would be able to pay back about 2/3 of the principle of these possible non-dischargeables.

I am wondering if I should or even could negotiate in paying these folks off early, leaving the hard core creditors to fight over scraps.

[DeadManCrawling]

If they are truly nondischargeable, you can pay them back if you wish or make a settlement.

The BK court could, also, avoid the transfers, and take the money right back from the creditors, to be shared among ALL creditors.

If that happens, I have no idea what those paid off creditors would be considered. Are these secured loans?

Another consideration: In order to get paid at all, a creditor must file a claim with the BK court. In almost every case, some creditors do not file claims.

In that scenario, you would be settling with, and paying, creditors who might not have filed a claim at all, and the result would be that you paid money that you didn't have to.

[JSFleischman]

Certain payments made to creditors within a period of time prior to filing for bankruptcy can be recovered by the trustee for distribution to all of your creditors on a pro rata basis.

If you make a payment to a creditor that is taken back by the trustee, and that creditor then files a successful nondischargeability action against you in bankruptcy court, you may find yourself paying twice on the same debt.

It's always a better idea to speak with your lawyer about the proper tactic to employ. Your lawyer may advise you to pay the creditor and wait to file your case, or to file now and expect that you'll need to pay the creditor post-bankruptcy if the debt is found to be excepted from discharge.

[OhioFiler]

He knows they are non-dischargable because he took cash advances with no intent to repay them.

You can pay off anyone you want. If the court deems they are preferential payments they get the payments back from the payee.

[swampwiz]

He knows they are non-dischargable because he took cash advances with no intent to repay them.

You can pay off anyone you want. If the court deems they are preferential payments they get the payments back from the payee.

No, I had every intent to pay them. What I didn't intend on was losing $20K in the stock market and not being able to find modestly decent work as a programmer for a year and a half after a long sabbatical (of course, the $20K would only extend the inevitable by 5-6 months.) All I need is a job making 2/3 of what I made a few years back, and everything would be OK (see my other threads.)