Pay off personal loan before filing

[calgirl67]

We are going to file Bk but we have one creditor who we cannot have discharged because it is our work.

I took a union loan of $4000 a few months ago. It is a signature/trust loan with one paper signed and not reported to credit. No credit check done, etc.

It gets repaid $200 a month from my paycheck.

I really want to pay this off before I file as it would cause HUGE problems if they were not paid and it was discharged.

If I paid it off in full right now when could I file Ch 7 and not have that seen as a preferential payment?

[frogger]

It depends on when you're planning on filing. If you're planning on filing in the next few months, it may well be a problem.

Also, have you met with an attorney yet?

[backtoschool]

We are going to file Bk but we have one creditor who we cannot have discharged because it is our work.

I took a union loan of $4000 a few months ago. It is a signature/trust loan with one paper signed and not reported to credit. No credit check done, etc.

It gets repaid $200 a month from my paycheck.

I really want to pay this off before I file as it would cause HUGE problems if they were not paid and it was discharged.

If I paid it off in full right now when could I file Ch 7 and not have that seen as a preferential payment?

It will be seen as a preferential payment and the trustee will go after the union for the money.

[DustinLH00]

It will be seen as a preferential payment and the trustee will go after the union for the money.

I don't have the answer to this question, but neither one of you addressed the question being asked. The OP stated a question and is aware that this is considered a preferential payment. The question is IF the loan is paid off now, how long would they have to wait to file.

[backtoschool]

I don't have the answer to this question, but neither one of you addressed the question being asked. The OP stated a question and is aware that this is considered a preferential payment. The question is IF the loan is paid off now, how long would they have to wait to file.

Please read the OP's post above. They want to know if the loan would be seen as a preferential payment and the answer is "yes". They would have to wait 3 months to file minimum if they did not want the trustee to come to the union and demand the money.

[DustinLH00]

We are going to file Bk but we have one creditor who we cannot have discharged because it is our work.

I took a union loan of $4000 a few months ago. It is a signature/trust loan with one paper signed and not reported to credit. No credit check done, etc.

It gets repaid $200 a month from my paycheck.

I really want to pay this off before I file as it would cause HUGE problems if they were not paid and it was discharged.

If I paid it off in full right now when could I file Ch 7 and not have that seen as a preferential payment?

I know that this is starting a fight, but I read the OPs original post 5 times now and nowhere does she ask if this is considered preferential payment. In her 5 lines of text, only 1 question is asked and it is "If I paid it off in full right now when could I file Ch 7 and not have that seem as a preferential payment?".

I am not trying to be a jerk, I just see too many people on here that are in a hurry to be the first to reply and don't read the question being asked thoroughly and just shoot off an aswer. It is very frustrating for those of us asking for advice and information. Thats all I am trying to say.

[BobMango]

Well, just because it's discharged doesn't mean you can't still pay it back. Why don't you talk to your union about it? Maybe if you let them know that you intend to pay it back after the BK you can avoid the adverse consequences you seem to be concerned about.

As to your question about timing between payoff and filing, I believe the look back for preferential payments is 90 days, but I'd ask an attorney to be sure.

[AngelinaCatHub]

I know that this is starting a fight, but I read the OPs original post 5 times now and nowhere does she ask if this is considered preferential payment. In her 5 lines of text, only 1 question is asked and it is "If I paid it off in full right now when could I file Ch 7 and not have that seem as a preferential payment?".

I am not trying to be a jerk, I just see too many people on here that are in a hurry to be the first to reply and don't read the question being asked thoroughly and just shoot off an aswer. It is very frustrating for those of us asking for advice and information. Thats all I am trying to say.

There is no reason for anger here. All in all everyone on this particular thread has and does give good information. It seems you are jumping to conclusions and there is no reason for this.

The answer to that Op's question is simple, he could reaffirm that debt. 'Hub

[DeadManCrawling]

Certainly he can reaffirm.

I have this exact situation with a propane company. I don't owe them much, but spoke with them directly and explained.

They know they will have to be included, but stated they will:

1. Accept payment on what is owed over a period of months.

2. Continue to do business with me.

Being in Florida, a propane company, for generator fuel can be vital.

I would suggest you call the lender a little before filing and explain it to them.

Then, if you can, make a payment a little after filing, as long as your attorney agrees. Never do anything like this without attorney approval, or if you are pro-se, a lot of research.

[AngelinaCatHub]

Certainly he can reaffirm.

I have this exact situation with a propane company. I don't owe them much, but spoke with them directly and explained.

They know they will have to be included, but stated they will:

1. Accept payment on what is owed over a period of months.

2. Continue to do business with me.

Being in Florida, a propane company, for generator fuel can be vital.

I would suggest you call the lender a little before filing and explain it to them.

Then, if you can, make a payment a little after filing, as long as your attorney agrees. Never do anything like this without attorney approval, or if you are pro-se, a lot of research.

I believe if you reaffirm, you can and must keep paying. 'Hub

[calgirl67]

Pref payments

Thanks everyone! Ok so it is considered preferential payments.

We will have to wait 90 days after paying it off to file Ch. 7. Which we have decided to do. We are retaining an attorney tomorrow so hopefully that will stop or at least slow down the nasty phone calls.

Going to the Union was not really an option as he is in law enforcement. That fact that we will be filing BK is not the issue, the fact that they would have been listed as a creditor to be discharged is. That fact alone would have made him look REALLY bad at his work.

Not the filing BK part, plenty of his workmates have done so in the past year due to their hours and overtime being cut and furlough days.

So we decided to just pay them off, retain an attorney and file in 90+ days.

[AngelinaCat]

calgirl67, you may need to wait a minimum of six months or 180 days to file. Depending on the district and trustee, the look back period can be from 180 days up to two years.

When you talk to your attorney, discuss this matter thoroughly. Since this is a Union, and involves your work, you may want to keep making the regular payments, and reaffirm the loan, if that is allowed. Or just keep making the payments, though I doubt you can do a 'ride-thru' here. An attorney in your area that is versed in labor and BK law will be the most useful here.

Good luck!