insider payment

[goryr88]

Here is my question. This insider payment lookback thing makes no sense. I paid a family member around $4000 over a period of time last year. The last time I paid them was in November. That was 7 months ago. My finances were in order then. What the !@#$% does my family have to do with this? I dont understand how the trustee can go after someone who is completely innocent and expect them to pay back what i owed them when they had nothing to do with this!! can someone shed some light on this? i wasnt in financial trouble in november. I am now. I have creditors who are getting aggressive, and i was gonna file by july 1. But now if i dont want to hang them, i have to wait until at least november! dont know if i can hold them off until then. i stopped paying creditors in march and was hoping to get this done by july, now not so much.

[Trixie007]

The way things are going, you'd likely be fine to hold off on filing until November. We're close to the one year mark of delinquent payments on 10 cc's and no suit yet!

[veryclose]

Scenario: I give my relative a large sum of money in exchange for something indicating the relative had loaned me that sum of money. In truth, there was no loan made - I'm just hiding money that could be used to pay debt.

Do you see the reason now?

[goryr88]

ive always understood that part, but this scenario isnt like that. thats wat pi33es me off

[2Bshinyandnew]

The bankruptcy code also assures all creditors are treated equally. Lets say a debtor paid his/her mom back for a $4000 loan 8 months ago. Meanwhile, the debtor's other unsecured creditors like Bank of America, Chase, etc. were paid back nothing. The BK code attempts to insure all creditors are treated equally. Most people want to pay their friends and family back first. That is natural and normal. However, it really isn't "fair" to all the creditors that the debtor paid mom back first, even though we understand why.

Also, in the case of an insider preferential payment, the trustee may offer the debtor the opportunity to settle the payment himself and keep their family member out of the process. It means paying that money back twice, once to the family member and again to the trustee for the benefit of all the creditors. If you don't want the trustee to look to your family member to give the money back, this is the best way to go. You can also wait.