Question about preferential payments

[indebt00]

more questions for my family member...

they paid thier inlaws $10,000 back 3-4 months ago for money they gave them to put a down payment on their house. they bought the house last year.

they are still in the "we are thinking about it" stages of bk planning and would not file until Feb or March.

will this be looked at as a preferred payment or preferential?

thanks you guys !!!

[StartingOver08]

This is considered an "insider payment" because it is a family member ("inlaws"). The look back period on insider payments is one year.

See this link about both preferential payments and insider payments and thier defenses: http://www.moranlaw.net/preferences.htm

[indebt00]

Thanks for the link.
So I wonder how that would be handled?? the link doesn't really say. They are still paying and current on all creditors and will be until they make that final decision.
does that matter or help?

[AngelinaCatHub]

Time is their friend. They need to stay out of bk as long as they can. The Trustee can sue the inlaws for that money. I had this happen and I address the Trustee's lawyer to allow my to pay the estate in lue of having the Trustee sue my god-daughter, so I paid twice. 'Hub

[StartingOver08]

One of the questions at my 341 was "Did you borrow any money from family members and when was the last repayment"? I have paraphrased it as I remember the question from the Trustee. I had made repayments but was well outside the 12 month lookback period.

The Trustee is looking to fund the BK estate and will look to the family member to 'claw back' payments to reapportion to the creditors including the trustee's fee. As Hub says: Time is their Friend. Make sure the repayment to insiders is outside of the 12 month lookback period.

[indebt00]

thanks guys...I am going to look at my questionaire and refresh myself. they live in same town as me....so will have 50% chance of having my trustee.