I have 5 accounts with AMEX that have a minimum payment of around $10-$20 and a Best Buy card that has a $25 minimum on it. I was wondering if it would be considered preferential treatment if I paid those up until I file for Ch. 13? Btw, I plan on filing for ch. 13 in 6 months or until they sue me. The larger minimum payments will not be paid. So why would I pay these? I just figured the payments are so small that I would rather pay them then go through the hassle of even more calls from creditors.
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yup it would be considered preferential treatmentOriginally posted by NeedOptions View PostFiled chapter 7 on 9/17
341 on 10/20
Chapter 7 Trustee's Report of No Distribution on 10/21
Discharged and Case Closed on 12/21/2010
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Even with the amounts so small?Comment
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It's only considered a preference if it reaches a certain level in the 90 days prior to filing. So count back 90 days from the day you filed. If you paid more than $600 to any single creditor, then it's an "avoidable" preference.
However, if you were paying all creditors what they were due, it may not be a preference since the creditors received no more than they would get under a Chapter 7 liquidation. The whole purpose of the preference powers that the Trustee has, is to level the playing field and make sure a single (or certain) creditor(s) doesn't get treated differently.
Even if you're paying $30/month on 10 cards, it would never reach a preference in the 90 days prior to filing, since that would be 3 x $30 or $90 to each creditor.Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
Status: (Auto) Discharged and Closed! 5/10
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Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.Comment
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Thanks JB. It sounds like it should be ok then as I won't go over the $600/creditor mark prior to 90 days before filing.Comment
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