A Preference Example

Wasson and ThornhillPre-Bankruptcy Planning

Here’s an example of a preference—paying a favored debt before filing bankruptcy.  If you know what it is, it’s usually not hard to avoid.   Last week we explained why paying a creditor before filing bankruptcy could cause problems during bankruptcy. That’s especially true if the creditor you pay is one that you have personal reasons to favor. We explained the circumstances in which such a … Read More

Paying a Special Debt Before Bankruptcy Could Be a Preference

Wasson and ThornhillPre-Bankruptcy Planning

You may feel like paying a special debt, and during this time of the year you may even get some extra money to do it. Maybe you shouldn’t.   Last week we explained how giving a significant gift before bankruptcy could cause problems during bankruptcy. This also applies to selling something for much less than it is worth. Such a gift or sale might … Read More

Unexpected Benefit: Resolve Your Preference Problem through Chapter 13

Wasson and ThornhillBankruptcy Law

You can avoid the risks involved with dealing with the Chapter 7 trustee if you resolve your preference problem through Chapter 13.   Our last several blog posts have been about the problem of preference payments: 3 weeks ago we introduced the problem resulting from paying a favored creditor before you file bankruptcy 2 weeks ago we discussed avoiding the … Read More

Unexpected Benefit: Negotiate Out of a Preference Mess

Wasson and ThornhillBankruptcy Law

Your lawyer can likely negotiate with your Chapter 7 trustee to prevent the forced repayment of your prior payment to a relative or friend.   Our blog post two weeks ago introduced an uncomfortable problem: preference payments to a friendly creditor. (Please read that blog post before reading this one.) Then last week we discussed two possible solutions to this … Read More