In your opinion

[okiemom2008]

We are filing and my lawyer is hard to understand.

He says one thing and then the next time he says something totally different,

My problem is-my mom does not need to find out about the bk if at all possible. She has ALOT on her plate right now and this is just something I want to keep from her unless she has to know.

Problem is--

She is a co-signer on my student loan. It is currently being paid by me on time every month.

and
she is someone who we paid her credit card off in June for over 5000.00 for her letting us transfer our balances onto her card. The card is in her name-has a 0 balance now but my lawyer says the trustee will go after HER not the credit card company but HER for the money and get a judgement agains her.

I just want to keep this from her for her own health if possible. Does anyone have any opinions.advice?

[justbroke]

Ahh... the insider preferential payment. There is at least one defense on insider payments. That is that the Trustee needs to prove that you were insolvent at the time. From what I know, things under $5K tend to not be challenged (because of costs), unless the Trustee has strong evidence.

Remember, the Trustee would have to prove that you were insolvent at the time. You may also be able to negotiate with the Trustee as to the amount to settle it.

This may still involve your mom because the Trustee can look back 365 days (one year) on an insider preference.

This is all I really know on this topic. I haven't experienced this issue personally. Since student debt is non-dischargeable (under most cases), I don't see any issue with that one.

[okiemom2008]

Ahh... the insider preferential payment. There is at least one defense on insider payments. That is that the Trustee needs to prove that you were insolvent at the time. From what I know, things under $5K tend to not be challenged (because of costs), unless the Trustee has strong evidence.

Remember, the Trustee would have to prove that you were insolvent at the time. You may also be able to negotiate with the Trustee as to the amount to settle it.

This may still involve your mom because the Trustee can look back 365 days (one year) on an insider preference.

This is all I really know on this topic. I haven't experienced this issue personally. Since student debt is non-dischargeable (under most cases), I don't see any issue with that one.

I just feel like she is probably going to get a letter between one of the two--but I have no idea how it works. I would be willing to pay the trustee the whole amount if he would just leave her alone and send no letters or anything but obviously I don't want him to know that.

[HHM]

Before any lawsuit is filed within BK court...the trustee will send a demand letter to your Mother.

[okiemom2008]

Before any lawsuit is filed within BK court...the trustee will send a demand letter to your Mother.

so there is no way I am going to know when they send it. It does not make sense to me why they would go after her when the payment went to her card directly from my bank account.

It is so annoying !!!

[OhioFiler]

so there is no way I am going to know when they send it. It does not make sense to me why they would go after her when the payment went to her card directly from my bank account.

It is so annoying !!!

How old are you? How old is your mother? Unless you're 18 and living with her or she old and frail I don't see the importance of hiding this from her at any cost.

[lalap123]

Why would they go after your mother and not the creditor you paid? I did the same thing - paid $3000 down on my husband's credit card in early February - and was just waiting the 90 days. I knew it would be considered a preferential payment but didn't think it was considered an "insider" payment since it did not go directly to a family member. Can anyone shed light on this? Also, I am only bringing in around 10 percent of our monthly income but did cash in a small pension fund in February, so since the money came out of our joint checking account couldn't I argue that it was my husband's money?

[justbroke]

lalap, they go after the mother because the mother is the creditor.

[lalap123]

Thanks for the reply. So do you think the same applies to my situation as well?

[justbroke]

Are you in a community property State? If so, I don't think you have an insider issue. But that's my own read of it. I have been wrong before.

[lalap123]

No, I am not in a CP state (Georgia). I thought that was a good thing prior to this I'm still thinking I could defend it all by saying that the money came from a joint checking account in which my husband's paychecks for the month are (barely) over $3000, which was the amount paid to his card. Can't wait to find out the atty's take on this. Hopefully he's seen it before!

[justbroke]

The argument could be that the money were owned as tenants by the entireties (jointly owned). That would make it untouchable (not part of the Estate). At least that's my read for the 11th Circuit of which Georgia and Florida are part of. They may not even think anything of this.

Good luck with the lawyer.

[jennordhavn]

My parents co-signed on a student loan for me and I had to list them as a co-signer on the BK petition for that loan. I let them know ahead of time that they would be notified of my BK, but that since my student loan was non-dischargable, I would continue to make timely payments and when the BK was discharged everything would "go back to normal".

Even if you didn't list your mother as a co-signer on the petition, the student loan company will transfer the loan to your mother's name during your BK and will attempt to collect money from her. When you are discharged, they will return the loan to your name. You can still make payments, but your mother will still be notified.

Also, if your loan is with Sallie Mae, be aware that they will change the account number during this process. I sent a payment in before I was aware of this and they credited it to my other federal loans that are in deferment, causing my private co-signed loan to show it was late.

[fltoo]

If you have a paper trail where you can prove that you transferred money to your mother's cc and you paid the cc directly, not to your mother, you might be able to defend the pref payment as "not insider". There is a lot of case law where a judge overturned a trustee's claim of an insider preferential payment. Unfortunately, it is a situation where you (your lawyer) has to do a lot of research and find a situation that comes close to matching yours. Most lawyers, if not familiar, will not take the time. If accomplished, then the preferential payment will only have a 90 day look back.

You are still taking a chance that your defense will not fly and your mother will be involved.

I had a fraudulent transfer problem and although I had a pretty good defense, I decided not to take the chance and waited it out the two years, the look back period for these transfers.

If you want to eliminate this worry completely and entirely, wait the few months until June to file when your look back period is over and this will not even be an issue.

[okiemom2008]

lalap, they go after the mother because the mother is the creditor.

How is my situation diff then laplap?