Chapter 7 custody battle

[db1993]

Hello,

im considering filing chapter 7 bankruptcy in the next few weeks. The only thing that concerns me is I’m currently in in a custody battle. Will making big payments to my attorney be considered preferential payments? I need to file but I don’t want to burn my attorney and lose her or my custody case

[justbroke]

You'll have to talk to your family law attorney regarding how their fees are structured in your fee agreement. I'm no expert on this, so it's an important discussion with that attorney. If you're using an attorney to file your bankruptcy, you may want to discuss this with them about how to protect the family law attorney from being subjected/relegated to creditor status and exposed to any preferential payment treatment by the Chapter7 Trustee.

Welcome to BKForum.

[despritfreya]

Payments to your DR attorney made within 90 days prior to filing that exceed $600 in a consumer case or just over $6,800 in a non-consumer case must be disclosed on the Statement of Financial Affairs.

The bankruptcy trustee will review the transaction to see if it is a preference that can be recovered. If you are paying on an antecedent debt (a debt that was in existence before you file) and which was not a payment for services rendered at the time payment was made, the the trustee can recover the funds.

The trustee can also recover any retainer that is being held by the DR attorney that has not been applied to fees earned.

You need to discuss this with your BK attorney who should then reach out to the DR attorney to see what, if anything, can be done (like waiting 91 days).

Des.