Bankruptcy Law

Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.

Ask a Lawyer,
Get an Answer ASAP!

Bankruptcy Law

i owe my mothers family trust 76000.00, if we create a deed

Customer Question
of trust to secure this...
i owe my mothers family trust 76000.00, if we create a deed of trust to secure this debt with some real estate i own free and clear, will this deed of trust be honored in the event i file a bankruptcy?
Submitted: 8 years ago.Category: Bankruptcy Law
Show More
Show Less
Ask Your Own Bankruptcy Law Question
Answered in 1 hour by:
2/3/2009
Bankruptcy Lawyer: Ellen, Attorney replied 8 years ago
Ellen
Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36,715
Experience: Bankruptcy Lawyer. Experienced.
Verified

Hello,

Thank you for your question. I am happy to assist you.

Unfortunately that could be the result. The deed would be considered to be a "preference" even though the debt is legitimate and would typically be set aside by the bankruptcy trustee.

Let me explain.


A transfer of the debtor’s assets to a creditor that results in a creditor receiving more than the creditor would have in a Chapter 7 bankruptcy, is typically considered a “preference". A security interest is considered a transfer.

Bankruptcy Code §547 provides for the avoidance of preferential transfers within 90 days before the bankruptcy filing date for third parties. Transfers to insiders (including a relative) are subject to a longer avoidance reach back of one year.

Bankruptcy Code §547 is attached in full:


Section 547. Preferences.
(a) In this section—
(1) “inventory” means personal property leased or furnished, held for sale or lease, or to be furnished under a contract for service, raw materials, work in process, or materials used or consumed in a business, including farm products such as crops or livestock, held for sale or lease;
(2) “new value” means money or money’s worth in goods, services, or new credit, or release by a transferee of property previously transferred to such transferee in a transaction that is neither void nor voidable by the debtor or the trustee under any applicable law, including proceeds of such property, but does not include an obligation substituted for an existing obligation;
(3) “receivable” means right to payment, whether or not such right has been earned by performance; and
(4) a debt for a tax is incurred on the day when such tax is last payable without penalty, including any extension.
(b) Except as provided in subsections (c) and (i) of this section, the trustee may avoid any transfer of an interest of the debtor in property—
(1) to or for the benefit of a creditor;
(2) for or on account of an antecedent debt owed by the debtor before such transfer was made;
(3) made while the debtor was insolvent;
(4) made—
(A) on or within 90 days before the date of the filing of the petition; or
(B) between ninety days and one year before the date of the filing of the petition, if such creditor at the time of such transfer was an insider; and
(5) that enables such creditor to receive more than such creditor would receive if—
(A) the case were a case under chapter 7 of this title;
(B) the transfer had not been made; and
(C) such creditor received payment of such debt to the extent provided by the provisions of this title.
(c) The trustee may not avoid under this section a transfer—
(1) to the extent that such transfer was—
(A) intended by the debtor and the creditor to or for whose benefit such transfer was made to be a contemporaneous exchange for new value given to the debtor; and
(B) in fact a substantially contemporaneous exchange;
(2) to the extent that such transfer was in payment of a debt incurred by the debtor in the ordinary course of business or financial affairs of the debtor and the transferee, and such transfer was—
(A) made in the ordinary course of business or financial affairs of the debtor and the transferee; or
(B) made according to ordinary business terms;
(3) that creates a security interest in property acquired by the debtor—
(A) to the extent such security interest secures new value that was—
(i) given at or after the signing of a security agreement that contains a description of such property as collateral;
(ii) given by or on behalf of the secured party under such agreement;
(iii) given to enable the debtor to acquire such property; and
(iv) in fact used by the debtor to acquire such property; and
(B) that is perfected on or before 30 days after the debtor receives possession of such property;
(4) to or for the benefit of a creditor, to the extent that, after such transfer, such creditor gave new value to or for the benefit of the debtor—
(A) not secured by an otherwise unavoidable security interest; and
(B) on account of which new value the debtor did not make an otherwise unavoidable transfer to or for the benefit of such creditor;
(5) that creates a perfected security interest in inventory or a receivable or the proceeds of either, except to the extent that the aggregate of all such transfers to the transferee caused a reduction, as of the date of the filing of the petition and to the prejudice of other creditors holding unsecured claims, of any amount by which the debt secured by such security interest exceeded the value of all security interests for such debt on the later of—
(A)
(i) with respect to a transfer to which subsection (b)(4)(A) of this section applies, 90 days before the date of the filing of the petition; or
(ii) with respect to a transfer to which subsection (b)(4)(B) of this section applies, one year before the date of the filing of the petition; or
(B) the date on which new value was first given under the security agreement creating such security interest;
(6) that is the fixing of a statutory lien that is not avoidable under section 545 of this title;
(7) to the extent such transfer was a bona fide payment of a debt for a domestic support obligation;
(8) if, in a case filed by an individual debtor whose debts are primarily consumer debts, the aggregate value of all property that constitutes or is affected by such transfer is less than $600; or
(9) if, in a case filed by a debtor whose debts are not primarily consumer debts, the aggregate value of all property that constitutes or is affected by such transfer is less than $5,000.
(d) The trustee may avoid a transfer of an interest in property of the debtor transferred to or for the benefit of a surety to secure reimbursement of such a surety that furnished a bond or other obligation to dissolve a judicial lien that would have been avoidable by the trustee under subsection (b) of this section. The liability of such surety under such bond or obligation shall be discharged to the extent of the value of such property recovered by the trustee or the amount paid to the trustee.
(e)
(1) For the purposes of this section—
(A) a transfer of real property other than fixtures, but including the interest of a seller or purchaser under a contract for the sale of real property, is perfected when a bona fide purchaser of such property from the debtor against whom applicable law permits such transfer to be perfected cannot acquire an interest that is superior to the interest of the transferee; and
(B) a transfer of a fixture or property other than real property is perfected when a creditor on a simple contract cannot acquire a judicial lien that is superior to the interest of the transferee.
(2) For the purposes of this section, except as provided in paragraph (3) of this subsection, a transfer is made—
(A) at the time such transfer takes effect between the transferor and the transferee, if such transfer is perfected at, or within 30 days after, such time, except as provided in subsection (c)(3)(B);
(B) at the time such transfer is perfected, if such transfer is perfected after such 30 days; or
(C) immediately before the date of the filing of the petition, if such transfer is not perfected at the later of—
(i) the commencement of the case; or
(ii) 30 days after such transfer takes effect between the transferor and the transferee.
(3) For the purposes of this section, a transfer is not made until the debtor has acquired rights in the property transferred.
(f) For the purposes of this section, the debtor is presumed to have been insolvent on and during the 90 days immediately preceding the date of the filing of the petition.
(g) For the purposes of this section, the trustee has the burden of proving the avoidability of a transfer under subsection (b) of this section, and the creditor or party in interest against whom recovery or avoidance is sought has the burden of proving the nonavoidability of a transfer under subsection (c) of this section.
(h) The trustee may not avoid a transfer if such transfer was made as a part of an alternative repayment schedule between the debtor and any creditor of the debtor created by an approved nonprofit budget and credit counseling agency.
(i) If the trustee avoids under subsection (b) a transfer made between 90 days and 1 year before the date of the filing of the petition, by the debtor to an entity that is not an insider for the benefit of a creditor that is an insider, such transfer shall be considered to be avoided under this section only with respect to the creditor that is an insider.


Please hit ACCEPT so that I can get credit for my work

Bonuses and Positive Feedback gratefully accepted!


THIS IS FOR INFORMATION ONLY. NO ATTORNEY-CLIENT RELATIONSHIP EXISTS. PLEASE CONSULT A LAWYER IN YOUR STATE FOR LEGAL ADVICE

Ellen
Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36,715
Experience: Bankruptcy Lawyer. Experienced.
Verified
Ellen and 87 other Bankruptcy Law Specialists are ready to help you
Ask your own question now
Ask Ellen Your Own Question
Ellen
Ellen
Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36,715
36,715 Satisfied Customers
Experience: Bankruptcy Lawyer. Experienced.

Ellen is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises!

Gary B.Edmond, OK

My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer.

EricRedwood City, CA

I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight.

MichaelWichita, KS

PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent.

Three H.Houston, TX

Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!!

ElaineAtlanta, GA

It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem.

TonyApopka, FL

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

< Previous | Next >

Meet the Experts:

Terry L.

Terry L.

Attorney

2,679 satisfied customers

Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.

cortrightlaw

cortrightlaw

Attorney

511 satisfied customers

Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.

JoeLawyer

JoeLawyer

Attorney

376 satisfied customers

Attorney in the practice of Bankruptcy Law since 1996

A.J.

A.J.

Attorney

262 satisfied customers

Experienced consumer bankruptcy attorney.

Fritz

Fritz

Attorney

209 satisfied customers

Florida attorney with extensive experience in Chapter 7 and Chapter 13 consumer bankruptcy cases

Law Girl

Law Girl

Attorney

153 satisfied customers

I am an attorney.

Paul K, Esq.

Paul K, Esq.

Attorney

141 satisfied customers

10 years Exp., Great customer service, Prompt responses.

< Previous | Next >

Related Bankruptcy Law Questions
I have the same question. I had a Chapter 7 bankruptcy 13
I have the same question. I had a Chapter 7 bankruptcy 13 years ago. I have not seen on my credit report for the last 6 years. The SBA question says have you ever had a bankruptcy? Is it fair to say n… read more
INFOLAWYER
INFOLAWYER
Partner
Doctoral Degree
56,287 satisfied customers
In a situation where a property owner is being foreclosed
In a situation where a property owner is being foreclosed upon by the city for property taxes.. no mortgage, some liens, including one state and one federal, but still about 100k in equity.. would tha… read more
Asad Rahman
Asad Rahman
Attorney
J.D.
2,289 satisfied customers
Its been awhile since I asked this question- how does one
Its been awhile since I asked this question- how does one open a case that was dismissed for failure to make plan payments? 2. How do I prove this case was the reason for the failure of my own bankrup… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
I am the buyer on a land contract. The seller wants to get
I am the buyer on a land contract. The seller wants to get out of the contract to go with another offer/contract. They have threatened to file bankruptcy if we do not accept a small fee to walk from o… read more
DrakeLAW
DrakeLAW
Juris Doctorate
978 satisfied customers
Law Educator, Esq. (ONLY) (This is on the affirmative
Law Educator, Esq. (ONLY)(This is on the affirmative defenses)This is my first defense below There are overwhelming newly discovered clear and undeniable evidences that proved that the plaintiff Commi… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
Law Educator, Esq. (ONLY) This is on the Answer I just
Law Educator, Esq. (ONLY)Good morning,This is on the AnswerI just included the case law to this part of the fraud defense is it okay?There are several newly Discovered evidences found, that clearly an… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
I was issued a complaint and summons gor a reposession for
I was issued a complaint and summons gor a reposession for degaulting on my lease. I paid my myppast due my lesse is current on my vehicle. Could they withdrae the small claim … read more
Phillips Esq.
Phillips Esq.
Attorney
Juris Doctor
18,356 satisfied customers
If a wife wants to file banckruptcy singlary, without her
if a wife wants to file banckruptcy singlary, without her husband what wlll happen to the joint house? and any joint credit cards/ or his personal credit cards? thanks… read more
Barrister
Barrister
Attorney/Landlord/Realtor
Doctoral Degree
35,334 satisfied customers
When applying for Bankruptcy-- what questions should I be
When applying for Bankruptcy-- what questions should I be asking a lawyer?? This is the case: 23 year old Student with no assets - Student loans and Credit Card debt that they can not afford to pay of… read more
DrakeLAW
DrakeLAW
Juris Doctorate
978 satisfied customers
Law Educator Esq. (ONLY) (This is on bankruptcy) When should
Law Educator Esq. (ONLY) (This is on bankruptcy) When should I be thinking of filing bankruptcy? do I have to wait until judgment is given on the foreclosure case before I file bankruptcy? Can I still… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
Received a notice of automatic dismissal without the entry
Received a notice of automatic dismissal without the entry of a discharge. for failure to file documents. a/b, D, E/F,I,J,J2,statement of your current monthly, income BUT I filed these forms but at 2 … read more
DrakeLAW
DrakeLAW
Juris Doctorate
978 satisfied customers
I just started a chapter 13 bankruptcy and the lawyer told
i just started a chapter 13 bankruptcy and the lawyer told me how much i would pay for 5 years. i called his office about week later and told one the assisstants that i amm short on money and ask if i… read more
Terry L.
Terry L.
Attorney
Doctoral Degree
2,679 satisfied customers
I own a business that had a couple of rough years in 2013
I own a business that had a couple of rough years in 2013 and 2014. In 2015 and 2016 I did manage to make a profit, but I again lost money in 2017. With negative income over the past 5 years and with … read more
LegalGems
LegalGems
Juris Doctorate
10,698 satisfied customers
Very important question - thank you in advance: A guy who is
Hi, very important question - thank you in advance: A guy who is a film distributor ripped us off and filed for Chapter 7 bankruptcy in the U.S. Bankruptcy Court. I never got notice of this as the Cou… read more
Phillips Esq.
Phillips Esq.
Attorney
Juris Doctor
18,356 satisfied customers
Educator only: defendants filed a response in the bankruptcy
For Law educator only:Hello sir, defendants filed a response in the bankruptcy court. Can you please help me understand this one?Thanks… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
Sorry I just lost what I wrote so I'll try to rewrite. I'm
Hi... sorry I just lost what I wrote so I'll try to rewrite. I'm basically looking into Chapter 13 in order to save my home. I don't have an exact auction date at this point and I'm hoping there is a … read more
DrakeLAW
DrakeLAW
Juris Doctorate
978 satisfied customers
I filed bankruptcy a tear ago and it still hant been
I filed bankruptcy a tear ago and it still hant been discharged because the trustee has a 3000 dollar check to dispurse. Hoe long does it take and is there a time limit? … read more
DrakeLAW
DrakeLAW
Juris Doctorate
978 satisfied customers
Situation. My wife's ex husband is filing for bankruptcy.
Situation. My wife's ex husband is filing for bankruptcy. Chapter 7 He owes his ex wife 40000$ For her legal fees which was stated specifically because she had a need to get an education because she w… read more
DrakeLAW
DrakeLAW
Juris Doctorate
978 satisfied customers

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

Show MoreShow Less

Ask Your Question

x