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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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are payments of bills for taxes owed, doctors and credit cards

Resolved Question:

are payments of bills for taxes owed, doctors and credit cards considered transfers? if i pay them should i keep each payment under $600 and make multiple payments or it doesn't matter.
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 1 year ago.

cfortunato :

Hi JACustomer,

cfortunato :

Certain pre-Bankruptcy payments to creditors are considered to be 'preferences', not 'fraudulent transfers'.

cfortunato :

Payments of more than $600 to any one unsecured creditor in the 90 days before filing a Bankruptcy can be 'avoided' by the Bankruptcy trustee.

cfortunato :

'Avoided' means the trustee can demand that the payment be forfeited to the trustee.

cfortunato :

This is the reason that debtors are told to stop paying most unsecured debts (such as credit cards) as soon as the debtor decides to file a Bankruptcy.

cfortunato :

Preferences only include payment for debts that are past-due, not current debts.

Customer:

if the payment is for taxes that must be paid or medical bills would they do this? i owe about $20,000 for personal credit. the remainding $1.2 million is for my husband's business and is owed to the small business administration and its delegates. we were 9/11 victims and the government didn't treat any of us who survived but had no one who died in the building very well. we were told the money we borrowed to continue our business would become grants and the personal guarantees voided. that never happened. had we been told the truth i doubt my husband would have continued his business. we felt it was our responsibility to keep people employed and we were sure the government would live up to its promise. we've become pretty cynical now.

Customer:

i have a lawsuit pending which will be heard may 28. i won't file until i find out if we win or not. someone forged documents claiming that all the money we repaid on a loan was interest and the entire principal is still owed. it's not true and he is a convicted felony forger so we don't know how this will come out. if we win i don't want to file until i have all my personal bills paid off which would be in another year.

cfortunato :

If more than $600 is paid to any one creditor - including for taxes or medical bills - and the debtor is insolvent at the time of payment, or will become insolvent because of the payment, that payment can be taken back by the Bankruptcy trustee if made less than 90 days before the Bankruptcy is filed.

cfortunato :

Insolvent means the debtor's total debts are greater than the debtor's assets.

cfortunato :

If the debtor is not insolvent at the time of the payment, and will not become insolvent because of the payment, and/or the payment is made more than 90 days before filing, then the trustee cannot take back that payment.

Customer:

thanks. i think it takes a month or two before a judgment is filed so i could probably file 90 days after paying off the bills.

cfortunato :

You're welcome!

Customer:

we would be insolvent because of the 1.2 million owed. our lives have been a mess since 9/11. the flag that is in the 9/11 photo came from one of my husband's boats and the city lost the flag. we tried suing them to get it back because they had no interest in find it but no one would take it pro bono because they said even if we win the city files laws retroactively and they'd never get paid. the flag that is going all over the world is not the one that was in the 9/11 photo but the city is happy passing it off as that flag.

cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience: Bankruptcy professor.
cfortunato and other Bankruptcy Law Specialists are ready to help you
Customer: replied 1 year ago.

I just reread your answer. i have a job and i get paid a salary but there is no way that i can pay the sba over a million dollars from my salary. i assume that would make the trustee consider that i am insolvent. all my husband receives is social security.


I have a payment to NJ from 2007 for sales tax for about $2500, one to NYS for about the same amount and another to a doctor for about $1200. I can pay NJ and the doctor in March but NYS can't figure out how much i really owe and i think that would take longer. Since sales tax is a mandatory payment would the trustee have to allow it even if it were made within the 90 day period.


I think i can keep $2500 in cash if i file and i think i'll need at least $3000-5000 for an attorney since the case isn't that simple and it's for myself and my husband so i assume this isn't part of the money a trustee would consider for a clawback.


All of the monthly payments i make are under $600. Nearly all were incurred years ago. Two creditors did reoopen my accounts after i made payments for two years but i am still just making monthly mininum payments because that's all i can afford.


Do they aggregate the payments if you pay about $300 a month to a creditor or just consider the monthly payment?


i really don't want to file bankruptcy so i am trying to avoid it but if i lose the court case i will have to file. it's disgraceful that someone would forge documents and use them for a lawsuit knowing that we lost all of our originals in the world trade center so it's hard for us to contest the case. the business did owe plaintiff $31000 when it became inactive. even though we didn't personally guarantee the debt as he is claiming i offered to pay this over time years ago. he wouldn't take it. the judge we originally had was reassigned. she seemed to believe that the lawsuit was a travesty but we have a new judge now so i have no idea what the ruling will be.


do you know how long it takes after the judge finds for the plaintiff before a judgment is filed and you have to respond? that might give me the 90 days i need to make sure there are no payments to creditors that are subject to review.

Customer: replied 1 year ago.


I did rate you however, i had some other questions.


If i go to court and lose the case where the Plaintiff forged the documents (not my signature but put my signature on phony documents) and get a judgment against me can i still settle instead of filing bankruptcy. my business partner is willing to lend me some money to settle if i have to but since i may win with his record of felony forgery i don't want to settle until the court date.


is it usual to have a clawback for payments to doctors or for small monthly payments to credit card companies. the total would probably be less than $4,000 for three months to all creditors combined.

Customer: replied 1 year ago.


Hi Andrea-


Will I be able to open another bank account at some point? i think i've figured out how i'll pay until i file bankruptcy if i lose.i know i shouldn't lose but you never know and i just want to be prepared.


the bill of sale completed by the plaintiff has no price in it so i am going to bring this up at court and ask for the completed one to see if he ever put the amount he loaned us in as part of the price. he may never have so his documentation would look even more forged..


thanks for asking about my back. the shots didn't work. i am now trying acupuncture. had the first treatment last week. she thought five and i should be okay. if not i am going to have to get the doctor to write a letter to the judge postponing the court date. no way i can walk to his court. it's at the opposite end of 80 centre from where you enter the building. i'd need a wheelchair and my husband couldn't handle it and i'm not sure i could because my hand is numb from my back problem.


shirley

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