Must Watch BEFORE Filing Chapter 7 Bankruptcy (2021)

TL;DR

Learn about the potential issues with preferential payments and fraudulent transfers in Chapter 7 bankruptcy.

Transcript

hey everybody john skiba here and in this video i'm going to tell you the two things that will absolutely blow up your bankruptcy so if you're looking to file chapter 7 bankruptcy in the near future watch this video first but if this is your first time here to my youtube channel please click subscribe that way you'll be notified each and every week... Read More

Key Insights

• 👨‍💼 Preferential payments to family members, friends, or business associates within 12 months before filing bankruptcy can be problematic and may require repayment.
• 📼 Fraudulent transfers, even if unintentional, within 2 years before bankruptcy can also cause issues and assets may be sold to repay creditors.

Questions & Answers

Q: What is a preference in bankruptcy?

A preference refers to paying back a debt to family members, friends, or business associates within 12 months before filing bankruptcy, which can be problematic as the bankruptcy trustee can demand repayment from them.

Q: What can happen if I've made preferential payments within the 12 months prior to filing bankruptcy?

If your family or friends do not repay the preferential payments demanded by the bankruptcy trustee, they can be sued and potentially face a judgment entered against them.

Q: Can preferential payments also apply to non-family members?

Yes, preferential payments can also be made to creditors who are not family members, but the look-back period is shorter, usually 90 days prior to filing bankruptcy.

Q: How can fraudulent transfers impact Chapter 7 bankruptcy?

Fraudulent transfers involve transferring assets for less than their value within 2 years before filing bankruptcy, which can be unwound by the court and sold to repay creditors.

Summary & Key Takeaways

• Making preferential payments to family members or friends within 12 months before filing bankruptcy can cause problems, as the bankruptcy trustee can demand repayment from them.

• Fraudulent transfers, such as transferring assets for less than their value within 2 years before bankruptcy, can be unwound by the court and sold to repay creditors.

• It's important to wait a full year or negotiate a settlement proposal if you've made preferential payments, and to avoid transferring assets for less than their worth to prevent issues in Chapter 7 bankruptcy.