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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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Can I sell most of my personal property to cover recurring

Customer Question

Can I sell most of my personal property to cover recurring secured debt payments and other living expenses with out fear of preferred payments to creditor prior to my bankruptcy?
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 3 years ago.

cfortunato :

Hi Terry,

cfortunato :

Payments to secured creditors do not generally qualify for preferential treatment status. You would have to pre-pay your secured debts for them to be treated as preferential payments. (For instance, if you paid 6 months of mortgage payments in advance, that could be treated as a preference.)

cfortunato :

The same applies to everyday living expenses. Paying everyday living expenses cannot be preferential payments, which can only be for pre-existing debt, not for things (goods and services) that you pay for as you receive them.