preferential payments

[sofarindebt]

I owe my mom roughly $1000. I plan to give her $700 of it this month because hubby got a bonus. Will the trustee really try to get it back? I read somewhere they won't bother or isn't worth thier time if less than $1k. Can anybody tell me if they had any preferences recovered, and the amt?

[BKTango]

Well technically the amount they "go after" is anything above $600. That's why the question of "have you made any preferential payments above $600?" is asked. Also yours will not be considered preferential to a creditor, it would be looked upon as an insider preferential payment, that question is asked also. Now as far as will anything actually happen, that depends on how thorough and "by the book" your trustee is. I had a made a payment to a creditor for over $900 thirty days prior to filing (I didn't anticipate filing when I did), the trustee overseeing our case, never batted an eye about it, or went after it. It was brought up at the 341 and both my husband and I truthfully told him, "yes" but still, he never went after it. It's a luck of the draw kinda thing really, but they may do something different with an insider payment. .

[SamanthaJones]

Preferential does not mean you cannot pay a legitimate debt.

But if you pay your mother, and not your credit cards, for example- that is not allowed since you would not be treating all creditors in a like fashion. If you simply decide to give your mother your money prior to filing to avoid giving up assets to the trustee- that is also not allowed. But you can always pay any debt you want, without preferring one creditor over another.

[SamanthaJones]

Is there a papertrail of the loan from your mother?

If not it may look suspsicious that you repaid a 'loan' to her. The advice I got from a lawyer, BTW- was to repay a family member after discharge to keep things simpler.

[hansky]

But you can always pay any debt you want, without preferring one creditor over another.

The payment "of any debt you want" is exactly why it is a preference.

[SamanthaJones]

I meant that even after a bankrupcty discharge

you can still pay any debt you want.

[SinkingFast]

Hansky is right.

It's payments to Creditors in excess $600 within 90 Days of filing.

Mom, however, is considered an Insider. The Court's gonna want to know about ANY payments to Insiders in the last year prior to filing.

There's no Law that says you cannot voluntarily repay any Creditor post BK. Pay Mom after your BK is over.

[sofarindebt]

I have to pay her back this month

she is going on vacation and needs the money. What is the worst that can happen, they go after her for the money. If that is the case, I can live with that, then I will just pay her again whatever she gives back to the trustee. I have over 100K in debt so I can live with paying her another $500 or so........

[HHM]

she is going on vacation and needs the money. What is the worst that can happen, they go after her for the money. If that is the case, I can live with that, then I will just pay her again whatever she gives back to the trustee. I have over 100K in debt so I can live with paying her another $500 or so........

Yeah, but why put your mom through that. If she "needs" the money for the vacation, where is she going to come up with the money to pay the trustee.

However, because the amount is less than $1,000, as a "practical" matter, the trustee will probably not be interested (even though legally he could probably get it).

[possumfat]

Most likely the trustee will not try to get the payment to your mom if you make it before filing due to the amount. In my case I had several pref. payments to creditors of $2,000 and less............he did not go after them, thats the good news. The bad news is since there was a pref. payment it changed my case to an asset case instead of a no asset case, the trustee spent over a year looking at everything, made me provide numerous documents and records. I filed Oct. 5th, 2005 and my case may close within the next 30 days. The pain and emotion you go through when the trustee looks at everything you have done is not worth you risking the $500 or $1000 you want to pay your mom. Very large price to pay in my opinion. If your case remains no asset and there are no problems your case will close in a timely manner. Not even worth the risk in my opinion.