preferential payment

[brokemomma]

Please Help! We had a major home repair done about 1 year ago. We paid half up front to the creditor and made arrangement through written agreement to pay the rest over the course of 1 year. I was current on the payments until about 5 monhs ago then due to the turmoil of BK I quit paying. This creditor I really want to reimburse. For one thing, he is local and likely to sue. Secondly, he did us a really big favor and did the job on credit because we really needed it done and he was the only one who would do it with partial payment down. He said at that time that he normally doesn't do loans but he would make an exception because he knows my family. Well now, things are starting to improve for husband and I. We are living on budget, saving for an attorney. I also took a second job at work.
We owe him about $845.00. I want to pay him at least $450 before we file in April. Could the court go to him for the $450 we paid?
Is there any honest way we can pay him his due with committing bankruptcy fraud? Thanks.

[keepmine]

Pay him and wait at least 90 plus days before you file.
I'm assuming the contractor isn't a family member.

http://doney.net/bkcode/11usc0547.htm

(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

[brokemomma]

This contractor is not family. He did some work for my father previously. That is how he knows us.

[forgotten]

As mentioned, to be safe pay him over 90 days before you file. Nothing stops you from paying him the rest of the money after you have filed either (you are just no longer legally required to).

[catleg]

Do you have a signed contract showing the debt?
Is the cost fair (arms length transaction)?
Can someone prove he is an insider to you?
He is basically a secured creditor.
Preferential payments only occur in the context of an unsecured debt.
As long as it is not ruled a fraudulent transfer, and the lookback for that is 2 years. Thus my questions.
He can claim a mechanics lien against your house to protect his interest in BK.
So the short answer is yes, you can pay him, and no, they can't take it back, as long as you have everything properly documented.