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    #1

    Preferential payments

    We garned a debtor's bank ( they rcvd the garn on 1/25), The debtor then filed bank on 2/18. We received a check for $610 for the garn. Now the debtors banko atny is demanding the payment back claiming its preferential. Does anyone know any statutes that we can use as a defense against the claim of this as a preferential payment.

    thank you
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    #2
    Anything over $600 that close to filing is a preferential payment, but the trustee would claw it back, not the filer's attorney.

    I would wait to do anything until the trustee comes to you demanding a payment of the preference.
    You can't take a picture of this. It's already gone. ~~Nate, Six Feet Under

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      #3
      Garnishment is the same as a voluntary payment as far as establishing a preference. Unless you exchanged new value with the debtor you're going to lose. Very unfortunate about the amount, if you'd gotten only $599 you'd be scot free.

      Now go away evil creditor.
      filed chapter 13..confirmed...converted to chapter 7...DISCHARGED!

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        #4
        Originally posted by catleg View Post
        Garnishment is the same as a voluntary payment as far as establishing a preference. Unless you exchanged new value with the debtor you're going to lose. Very unfortunate about the amount, if you'd gotten only $599 you'd be scot free.

        Now go away evil creditor.
        I totally agree that garnishment is the same as voluntary payment.

        But I think the trustee will claw the money back, not the filer's lawyer, it just a matter of procedure I was disagreeing with.
        You can't take a picture of this. It's already gone. ~~Nate, Six Feet Under

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          #5
          You give the debtors attorney NOTHING. That attorney has no rights and no claim on the money. The trustee however probably will.
          All information contained in this post is for informational and amusement purposes only.
          Bankruptcy is a process, not an event.......

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            #6
            I'm not sure a garnishment is preferential. You are probably correct in legal terms, but to be preferential as preferential gives the choice to the debtor. This debtor had no preference nor choice. I am sure the Trustee will get it back though. The creditor('out damn creditor, out I say") may just slip through if the Trustee has a large work load and the debtor has little of anything else to combine into a worthy effort. 'Hub
            If I knew it all, would I be here?? Hang in there = Retained attorney 8-06, Filed 12-28-07, Discharge 8-13-08, Finally CLOSED 11-3-09, 3-31-10 AP Dismissed, Informed by incompetent lawyer of CLOSED status, October 14, 2010.

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              #7
              Garnishment over unsecured debt is a preference issue. The code makes no distinction between volunatry payments or a garnishment.
              I'd agree with the others. Ignore the debtors lawyer . It's the trustee who has the authority to make force a turnover.

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