Question regarding preferential creditors

[murphsmom]

My husband has been planning on filing Chap 7 since Dec 2010. Stopped making CC payments on all of his accounts since then (hadn't used any of the cards since Sept).

It was just determined last month that I should file as well, as a joint case. We will be filing around May 23rd.

We have been paying my CC cards and debt consolidation regularly, on time, and haven't missed any payments except the ones that are due right now, which will not be paid.

Will my creditors be considered "preferential", even if they are solely in my name, and his cards were solely in his name?

If so, what can we expect to happen? Thanks

[newbie2]

If you paid any of them $600 or more, then yes, it would be considered preferential. Don't panic though, it really doesn't affect you, it affects them. Give your attorney a list of whom you have paid, when & how much, so that your schedules are accurate. If the trustee wants that money back he/she will get it from the creditor and not you.

[murphsmom]

OK, two more questions:

$600 at ONE TIME? Or $600 over the course of a few months?
How far back does this $600 payment rule apply?

I've got one charge for $1800 in November of 2010, for a contract that we signed in Spring of 2010 to haul and store our boat for the winter 2010/2011 season. If we didn't pay it, the marina would put a lien on our boat and sell it at auction. Would the marina be considered a creditor, as that was just a one time bill? My husband DID pay his CC bills in November of 2010, minimum payment. He stopped paying CC's in December.

Other than that one time bill paid, I don't have any payments over $600 to my Credit card company, I only have one CC card and have just paid the minimum each month of no more than $250 at a time.

I'm sorry for my ignorance.

[AngelinaCatHub]

I have to respectfully disagree with 'Newbie2'. First it was your husbands cards and he was going bk. Then it was advised that you joint bk, so you stopped paying YOUR CC's. There was no intent nor were your cards his. They were yours so your cards are not preferential to either case. Now once you both file jointly pay no others. You are legally fine. When your hub helped you pay on your cards that was your cards and since he has not filed, he can spend his money anyway he likes. I would simply list them and notate who's cards were who's. 'Hub

[mwr]

I side with Newbie2. Payments of $600 or more to any one of your creditors within 90 days of you filing bankruptcy could be considered a preference, but (as stated) you really have no reason to care unless you specifically care about that creditor.

[PANSYFACE]

sorry to hijack but would payments of $200 a month to a dentist also be a preference. My front teeth fell out and I had a hard enough time finding someone to take me without insurance. I had a huge gap in front - can't go job hunting like that!

[ValleYum]

OK, two more questions:

$600 at ONE TIME? Or $600 over the course of a few months?
How far back does this $600 payment rule apply?

I've got one charge for $1800 in November of 2010, for a contract that we signed in Spring of 2010 to haul and store our boat for the winter 2010/2011 season. If we didn't pay it, the marina would put a lien on our boat and sell it at auction. Would the marina be considered a creditor, as that was just a one time bill? My husband DID pay his CC bills in November of 2010, minimum payment. He stopped paying CC's in December.

Other than that one time bill paid, I don't have any payments over $600 to my Credit card company, I only have one CC card and have just paid the minimum each month of no more than $250 at a time.

I'm sorry for my ignorance.

You aren't ignorant. You are simply "unseasoned". You will be amazed at how fast you pick up on all of this.

The 90-days and $600 everyone is mentioning comes from a question on the Statement of Financial Affairs. It means that you must list any creditor that you paid $600 or more to in the 90 days before you filed your BK petition.

From this form's instructions:

List all payments on loans, installment purchases of goods or services, and other debts to any creditor made within 90 days immediately preceding the commencement of this case unless the aggregate value of all property that constitutes or is affected by such transfer is less than $600. Indicate with an asterisk (*) any payments that were made to a creditor on account of a domestic support obligation or as part of an alternative repayment schedule under a plan by an approved nonprofit budgeting and credit counseling agency.

So that you can understand what it is asking even better, take a look at the form here: http://www.uscourts.gov/uscourts/Rul...B_007_0410.pdf

The payment to the marina is more than 90 days ago. IMO, since it falls outside the time limit, it does not need to be listed.

As always, ask your attorney to be sure!!

[ValleYum]

sorry to hijack but would payments of $200 a month to a dentist also be a preference. My front teeth fell out and I had a hard enough time finding someone to take me without insurance. I had a huge gap in front - can't go job hunting like that!

If the monthly payments total $600 or greater in the 90 days before you file your bankruptcy petition, yes.

You could *strategically* pay them $175.00 for one of the 3 months prior to filing and then catch up the $25 shortage after you file. I would ask their office if that was possible. Some folks may not agree with using this strategy but finding a good medical/dental provider is tough enough without worrying about them having to pay the BK trustee back the money you gave them for the services they provided to you on credit.

As always, check with your lawyer!!!

[PANSYFACE]

THanks - how about verizon/verizon wireless - are they considered 2 creditors? Also there are multiple accounts - does business phone and home phone with verizon count as 1 creditor or by it's 2 different accounts. Sorry for being dense -my head hardly works anymore.

[frogger]

THanks - how about verizon/verizon wireless - are they considered 2 creditors? Also there are multiple accounts - does business phone and home phone with verizon count as 1 creditor or by it's 2 different accounts. Sorry for being dense -my head hardly works anymore.

If you have 2 account numbers or 2 separate bills, then it is two accounts. If it is all combined on one bill, then use that account # for the 1 account.

[mwr]

Multiple accounts are listed as multiple claimants, one for each account.

THanks - how about verizon/verizon wireless - are they considered 2 creditors? Also there are multiple accounts - does business phone and home phone with verizon count as 1 creditor or by it's 2 different accounts. Sorry for being dense -my head hardly works anymore.

[PANSYFACE]

thank you for your help!