Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
If you make payments to an "insider" (includes a close family member) within 12 months of filing for bankruptcy, the bankruptcy trustee can void the transaction and recover the payments as a "preference transfer." This is especially true where the fair market value of the equipment is substantially less than the loaa amount. The transaction may look like a sham, and the trustee will undo it.
You may be better served to treat your father the same as any other creditor, and then pay him back outside of bankruptcy, based on your moral rather than legal obligation.
Hope this helps.
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