insider payments

[63640]

Good morning

My wife and I have paid $1700 in monthly payments ( of around $140) of over the past year to one relative and about $900 (monthly payments $60) to another relative I have disclosed this fact on my statement of affairs and listed both as creditors on my schedule F. There are not going to be any other assets in my case. I am preparing for a clawback, but is there any chance these amounts may be abandoned by the trustee as being burdensome to the estate?

[despritfreya]

There is always a chance but don't hold your breath. You may get a better feel for the issues at the 341meeting and, of course, if you do not want the Trustee to "go after" the insiders, you will work it out with him/her.

Des.

[JSFleischman]

A lot of this depends on your total debt load, and how much each creditor would get after any recovery by the trustee. Your trustee is going to need to make a business decision about the legal fees involved to recover the insider payments, and how much will ultimately be available for distribution to creditors.

Perhaps the best bet is to talk with the insiders and discuss the risks, then wait to see what the trustee does in terms of rattling chains or filing a lawsuit. Remember, the insiders can always choose to settle or voluntarily repay the payments.

[63640]

Kind of what I figured JSF. I have a $400 priority unsecured debt for taxes (that I have a payment arrangement set up with the state) and roughly $20k in unsecured debt and about 25 unsecured creditors . To me it would seem that after the trustee takes his cut and the time & costs of filing a two suits and administering the claims that the amount would be to small to worry about. And one to the two relatives (The one with $900) is judgement proof as far as not having any income and very few assets. Praying and hoping to a smooth 341.

[justbroke]

Trustees are much smarter than just weighing the costs. They'll bluff and attempt to get your or the insider to settle.

[JSFleischman]

Excellent point. It all depends on how hungry the trustee is, local culture, and whether the insider is willing to call a bluff.