Preferential payments and insider

[OutofTime]

I'm going to be filing in the next 2-3 months and I understand the rule of $600 max to any person or creditor within 90 days or 1 yr. for insider. My question is, I'm filing separately and spouse isn't but we have a cc on both our names. If I file and she pays it off, would this be considered preferential? Also, If I include this Citibank acct. in a Ch. 7, what is the worst that can happen to my spouse? Will it count as a bk on her cr as well?

[AngelinaCat]

You are both in a Community Property state. Your spouse needs to leave that card alone, as anything she might try to pay off in the six months prior to your filing can be considered preferrential. Also, since this account is a joint acount with your name on it, it must be included in you BK, as well as any income she brings into the household apart from yours.

[OutofTime]

Thanks for the tip Angelina. Well $600 is the most we put in so far and we were just afraid that me filing BK separately and this being a joint acct would hurt her CR as it would like it was a BK. My spouse is a student in nursing school so has no income so that won't hurt me in my means test.

[keepswimming]

We stopped using all our cards nine months ago. Stopped paying all but three of them. Will we have to wait to file since we paid three but not the others?

The reason we paid them is they worked out a program for no interest and a lower payment since we told them of our situation. One of them was a no interest loan anyway so i kept paying them because i didnt feel they should suffer the universal default blow if they didn't penalize us as the others did.

[OutofTime]

I was told on this thread 6 month lookback for creditors but I read elsewhere 90 days. If you paid these creditors over $600, they will take the money back from these creditors due to it being preferential payments.

[DebtStinks]

I remember looking this up before we filed... it was 90 days for non-insiders (bank, credit cards, etc) and between 90 days and a year for insider (friends, family) transfers.

[OutofTime]

If someone else other than the person who owes the debt pays over $600, is this still considered preferential payment? As stated earlier, I plan to file on my own but me and spouse are on this particular card as joint. Is there a way for my spouse to not get affected by paying it off or are we s.o.l.?

[OutofTime]

real quick question for anyone out there, I paid exactly $600 to Citibank from Dec to Jan 2010, is this now considered preferential or would it be any amount over $600? I want to file in March but may have to wait now.

[DeadManCrawling]

Whether it is preferential probably doesn't matter as much as you think.

Even if it IS preferential, it does not affect your case. The BK trustee will simply demand that Citibank hand over the payment.

How this is reflected on your spouse's joint account is anyone's guess, but the court will sort it out for you.

If you are looking for a guaranteed method of letting the spouse pay down the mutual debt, I doubt anyone can say with certainty what will happen.

Best luck, in any case.