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Is a tuition deposit a preferential payment?

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    Is a tuition deposit a preferential payment?

    I'm not sure if this is the right forum.

    I am enrolled in a university program that begins in August. I had to put down a tuition deposit to hold my spot. The deposit was, inconveniently, over $600.
    Does this create any kind of preference issue that requires waiting 90 days? If so that's fine, I just need to know if that is a 'normal course' type of thing or a preferential payment.

    #2
    Bankruptcy Code Section 547 covers preferences. Subsection (c) provides:

    (c) The trustee may not avoid under this section a transfer—
    (1) to the extent that such transfer was—
    (A) intended by the debtor and the creditor to or for whose benefit such transfer was made to be a contemporaneous exchange for new value given to the debtor; and
    (B) in fact a substantially contemporaneous exchange;
    I think your tuition deposit is a contemporaneous exchange. Check with an attorney to be sure.
    LadyInTheRed is in the black!
    Filed Chap 13 April 2010. Discharged May 2015.
    $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

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