Are these insider/preferential payments or no?

[rjmwx81]

My aunt had an American Airlines voucher worth $240 that I purchased from her in order to take a trip home recently. Since she's a family member, is the court going to see this as an insider payment, even though I was buying something of value?

I have the same question about the downpayment I placed on my car that I financed recently...will the trustee see the $1000 paid to the dealership as an insider or preferential payment?

[MSbklawyer]

No. Neither of them are antecedent debts. Therefore, they cannot be preferences. They are contemporaneous exchanges. Contemporaneous exchanges are specifically carved out of the definition of "preference" by 547(c).

11 USC 547(b):

(b) Except as provided in subsections (c) and (i) of this section, the trustee may avoid any transfer of an interest of the debtor in property--

(1) to or for the benefit of a creditor;

(2) for or on account of an antecedent debt owed by the debtor before such transfer was made;

(3) made while the debtor was insolvent;

(4) made--

(A) on or within 90 days before the date of the filing of the petition; or

(B) between ninety days and one year before the date of the filing of the petition, if such creditor at the time of such transfer was an insider; and

(5) that enables such creditor to receive more than such creditor would receive if--

(A) the case were a case under chapter 7 of this title;

(B) the transfer had not been made; and

(C) such creditor received payment of such debt to the extent provided by the provisions of this title.

(c) The trustee may not avoid under this section a transfer--

(1) to the extent that such transfer was--

(A) intended by the debtor and the creditor to or for whose benefit such transfer was made to be a contemporaneous exchange for new value given to the debtor; and

(B) in fact a substantially contemporaneous exchange;

[rjmwx81]

Superb. Thanks very much.

[wipetheslate]

No. Neither of them are antecedent debts. Therefore, they cannot be preferences. They are contemporaneous exchanges. Contemporaneous exchanges are specifically carved out of the definition of "preference" by 547(c).

11 USC 547(b):

I hadn't known about contemporaneous exchanges. I had major health issues earlier this year and my sister took in my two elderly dogs. I paid for vet care, etc., but what would happen is she took them to the vet and then I would sent her payment when she knew how much it was. Between vet care, food, and medicines, I've given her about $700 and my one remaining dog needs to see a vet again.