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Insider payment?

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Lurker22
Frequent Contributor

Re: Insider payment?


@FireMedic1 wrote:

Open up a checking account with a bank you have no debt with.

 


I agree with everyone except the "open a new account"@Lurker22 

Nowhere did it say anything about opening accounts nor what CU's do if you file. That was your case you exlained. No case matches. Lets keep it on topic which has been addressed. The OP needs legal advice that we can not give unless we hold a law degree. I'll ping my pal @despritfreya who is a BK Attorney and will get a more in depth explanation.

 


Did I misunderstand your post (edited by me) - me stating I don't agree with opening a new account isn't legal advice, my point is the OP should do their own research, most banks (CU's are different) will not mess with your deposit accounts, I'm not sure a lawyer would be able to provide banking advice 

 

I've learned a lot from you over the years and totally respect you but - I disagree with you on this one point

Message 11 of 13
despritfreya
Frequent Contributor

Re: Insider payment?


I'll ping my pal @despritfreya who is a BK Attorney and will get a more in depth explanation.

Thanks for the "ping".  Let me circle back to this either this evening or tomorrow morning.

 

Des.

Message 12 of 13
despritfreya
Frequent Contributor

Re: Insider payment?

Original Post:

 

“I paid my dad back on a large loan he had lent me last year ($20k). I'm planning on filing chapter 7, if I make sure the file date is over a year after I paid him back, will he be safe from getting sued by the trustee?. . .”

 

Most likely yes. You are correct that the preference period for an insider is 1 year. In all likelihood, waiting past the 1 year mark will work. The trustee could look to 11 USC 548 (fraudulent conveyance) but if there is a valid paper trail, your dad has a defense.

 

Please note that a trustee does not want to go after a family member. Typically, if there is a claim held by a trustee against a family member, the trustee will reach out to the debtor to see if the debtor wants to cover the claim.

 

_____________________________________

 

@TRC_WA wrote:

 

“I once borrowed $10k from my parents to relocate cross country for a new job and nobody ever knew about it... nothing documented... no promise to pay signature... nothing. I just sent them a check for $500 a month until it was paid off. Point being... how would the trustee even know?”

 

and

 

“I'm not suggesting anyone try to hide anything from the trustee I'm just saying that unless it's a documented transaction how would they even know... When I filed all they got from me was tax returns and paystubs. They never saw any bank statements and the only thing they got related to that was the monthly expense report I filled out.”

 

The trustee will know because a debtor is expected to be truthful. If the payments fall within the preference period they must be disclosed. If not disclosed and the Trustee finds out, the Debtor may face criminal charges. Not worth the risk. Also, while a few may not, many trustees ask for bank records going back 6 months to 1 year. Some even ask for such records going back 4 years, especially if they “smell a rat”.

 

_________________________________________

 

@Lurker22 wrote:

 

“Did I misunderstand your post (edited by me) - me stating I don't agree with opening a new account isn't legal advice, my point is the OP should do their own research, most banks (CU's are different) will not mess with your deposit accounts, I'm not sure a lawyer would be able to provide banking advice.”

 

I think @FireMedic1 was only commenting that the CU/opening a new account issue is “off topic” as it does not relate to a preferential payment to an insider, but I see another poster (not OP) mentioned opening a new account.

 

Bottom line - always get proper legal advice before making a final decision on any matter that may impact the success (or failure) of a bk.

 

Des.

Message 13 of 13
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