Making a payment to creditor within 90 days of filling

[dmeyer07]

Hi everyone i'm about to file Chpt. 7 pro se and I've been doing some reading and have some concerns about a payment i made to a bank that was trying to reposes my motorcycle.

On 08-12-12 a bank came to take my bike because i had a negative checking acct balance. I own this bike outright but i had borrowed some money against it through that bank, therefor linking my bike to my checking acct. Long story short my bike is now back in my name 100% and the bank is paid off in full (~950$).

Is this going to be a big deal?? Should i wait until 11-12-12 to file my forms?

Thanks!!
-Dave

[justbroke]

Two things about what they call a "preferential payment". First, you are right to think about what happens to payments you make 90 days immediately preceding the bankruptcy. Payments made during that period could be considered "preferential" if you paid (or preferred) one creditor over another. Second, this may not be a preference with this particular payment. If you are talking about a credit union (CU) where they held a lien against your bike, then you made a payment to a secured creditor.

Secured creditor payments are not preferences. This would be your car or your home or payment on some other property that is secured by a (consensual) lien.

Now, even if you did make a preferential payment, it would not be the end of the world. In fact, the Trustee doesn't even go after the debtor (you), they go after the creditor that received the preferential payment. If the debt was actually an unsecured debt, nothing would change the fact that it would be discharged at the end of your case anyhow. You would not owe anything.

The reason why most people worry about preferences, is that many preferential payments are actually made to family members or friends who loaned money near the bankruptcy and the debtor paid them back within that 90 days. The Trustee would go after the family member/friend to get the money on behalf of the estate.

You do not have this problem, because there was a lien which "secured" the payment. No preference.

[LadyInTheRed]

Welcome to BKforum, dmeyer07.

If you are going to file pro se, you should familiarize yourself with the BK Code: http://www.law.cornell.edu/uscode/text/11 and the Federal Rules of Bankruptcy Procudure: http://www.law.cornell.edu/rules/frbp. Also, find your local bankruptcy court's rules.

Here's the section from the Bankruptcy Code on preferences: http://www.law.cornell.edu/uscode/text/11/547

We will all be here to help you when you have questions. But, as your own attorney, there is no substitute for reading the law itself.

[keepsmiling]

Hi and Welcome!
Your state has a very rare thing called a Chapter 128. Have you looked into it to see if it might work for you? http://www.chapter128.com/