Attorney retainer considered preferrence payment?

[Aledrell]

My ex-wife and her new husband filed CH7 recently. She owes me several thousand in child support arrears yet in her schedules I see that they came up with $3000 for the attorney. Now, since I am a priority creditor can this be considered a preferrence payment of which I could fight for part of it?

[DebtEnder]

Domestic obligations can't be discharged so I'm not sure how that works in this case. She still owes you what has been court ordered. If she fails to pay this then aside from maybe some slight delays due to the BK process (not sure on this point tbh) you would pursue her for the back pay as you always would.

But in general a lawyer fee would not be a preferrence payment. However if it's higher then average I have heard of some judges ordering part of the fee disgorged, ie returned to the debtor, or sometimes if to much to exempt, to the trustee.

[HHM]

My ex-wife and her new husband filed CH7 recently. She owes me several thousand in child support arrears yet in her schedules I see that they came up with $3000 for the attorney. Now, since I am a priority creditor can this be considered a preferrence payment of which I could fight for part of it?

Short and final answer, NO.

Preference has to do with paying other "creditors", their attorney is not a creditor in BK, so the preference issue is not even triggered. The attorney fee is not an antecedent debt. Think of it this way, is their grocery bill a preference? No. Nor is it fraudulent conveyance because they received contemporaneous exchange of value.

Also, unless you know where exactly they got the money, you would have a hard time proving anything. All they have to say is the "new husband" paid for it out of his funds, and you lose. Your ex-wife is obligated to pay you, not the new husband.

I applaud the effort, but your out of luck on that line of reasoning.

[justbroke]

Now, since I am a priority creditor can this be considered a preferrence payment of which I could fight for part of it?

As HHM wrote, you'll be pretty hard pressed to turn a retainer paid to an attorney into a preference, as they are not a creditor.

Even moreso, if you did somehow get the Court to classify them as a creditor... they'd be entitled to administrative priority, which is higher than all other priorities.

[tdawg]

Only real option may be family court?

If this is being collected by the state, then they should be able to use enforcement efforts against her to collect. If she was supposed to pay you directly, then you could go to family court and have her held in contempt. You'd think a family court judge/commissioner would not be too happy with her when they see she paid that much on the retainer instead of at least paying part to you for child support.

I don't know how much the latter will do. I got a judgment against my ex in April for over $500 in past childcare and medical bills that she was supposed to pay and she was ordered to pay $20/month but hasn't paid a dime yet. Good luck! :-)