It was nice of you to help a friend in need, regardless of what happens...
Since you called her a friend, then you are probably considered an "insider" rather than a regular creditor. Therefore, she will likely have to report paying you in her bankruptcy petition
if she files bankruptcy within 12 months after paying you . This would probably lead the trustee
to avoid her payment to you, get the money back from you, and spread it out evenly among all the creditors, pro rata, since this would be deemed a "preference
Typically, it is wise for a debtor contemplating bankruptcy to wait at least a year after paying an insider if the debtor does not want the trustee to go after the insider. Or, some debtors opt to file their bankruptcy case first, then pay the insider afterward so the trustee can't avoid the tranfer.
If she makes $130,000/yr, then unless she has a LOT of kids at home, she will not likely qualify for Chapter 7
and will instead have to file Chapter 13
due to the Means Test
, which is a payment plan. Realistically, it may be better for her to settle the $50,000 rather than file bankruptcy. With her income, she may well wind up in a 100% plan, which means she makes enough money that the court will likely make her pay the entire $50,000 back. If this happens is not saving much by filing bankruptcy; she may just be trading interest for attorneys fees. However, if she settles the unsecured debts, she may be able to settle for around 40% and save herself 60% of the debt load (though there are debt consequences for the forgiven portion of the debt).
Let me know if you have other questions and I will try to help you! I hope this helps and a positive feedback is always appreciated if this was useful to you.LEGAL NOTICE: I am only licensed to practice law in certain state(s) and I cannot give legal advice to someone who does not reside in a state in which I am licensed, nor shall anything I say in the above answer or elsewhere on this site be deemed legal advice, even to someone who resides in a state in which I am licensed. Fees I receive for answering questions are paid for information, not for legal advice. This forum is designed to provide general information only, and information herein is not warranted to be correct or applicable in any way since laws may have been misinterpreted herein, since laws change from time to time, and since the impact of those laws on any particular situation varies. The information presented in this site shall not be construed to be formal legal advice nor the formation of an attorney-client relationship. Persons accessing this response are encouraged to seek independent legal counsel in their jurisdiction for guidance regarding their individual circumstances. Do not take any action or inaction based on information presented herein since it is informational and may not be accurate or applicable to you; it merely attempts to give you a basis of knowledge to help you formulate questions to ask a legal or other professional in a face-to-face meeting in your jurisdiction. Joseph Ross does not hold himself out to be a specialist or expert in any area, regardless of assertions made by any third party, and any implication of being an expert or specialist herein is made in error. I hope the information presented above is useful to you. Answer above (c) by Joseph Ross, all rights reserved.