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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2897
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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Hello My question is I won a settlement against and LLC company

Resolved Question:

Hello
My question is I won a settlement against and LLC company in Utah. The company paid me a lump sum with 16 payments to follow. After the company then declared Chapter 7 and the LLC trustee is saying that he has the right to perferential payments going back 90 days of the company declaring bankrupcy this company still owes me 70,000 dollars in the ninth court of Reno, Nevada. They are now trying to get money out of me In Utah court. Can they do this even though they still owe me 70,000 dollars. Thank You,
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 6 years ago.
Chat Conversation Started
Terry L. :

Hi and thank you for your question. In the future, you can request me to answer any further questions.

Terry L. :

I am sorry to hear this, but unfortunately, yes, the trustee does have this power to go after preferential payments.

Terry L. :

You are a creditor in the case. You will be allowed a proof of claim for the amounts owed, (be sure to file one).

Terry L. :

You are allowed to share in any asset distribution to creditors for your unsecured claim.

Terry L. :

So, you may get a portion of the money owed, depending on the total value of the assets liquidated.

Terry L. :

But, unfortunately, the law is there to prevent the debtor from paying just one or two creditors back (preference) as opposed as to the fair share to each creditor based on their total claim.

Terry L. :

You can fight it, though

Terry L. :

Defenses to preference include the following:

Terry L. :

Under 11 U.S.C. 547(c). They include:



  • contemporaneous exchanges;

  • payments made in the ordinary course of the business of the debtor and the creditor on ordinary business terms; and

  • security interests that secure debts that bring new value to the debtor.

  • amounts of subsequent credit extended and unpaid.


You would need to raise these defenses in an answer to a preference complaint. The burden will be on you to prove that despite the preference, the payment is protected by one or more of these defenses.


 

Terry L. :

do you have any questions?

Customer :

MY attorney seems to not want to proceed with this case since I have not been able to get a reply back from him. The payments that I have recieved add up to 11,737 dollars which the attorney recieved 4,000 dollars of that sum. Am I liable for the full amount.

Terry L. :

You are liable for the amounts paid to you. If the money was paid to your attorney, most likely that would have to be paid by you as well, since the attorney fees are contracted between you and your lawyer, not the payor.

Terry L. :

hopefully your situation could be covered by an exception. Talk to your attorney about the matter to see if they can fight the preference request for you.

Customer :

You have been very helpful and I will go ahead and pay for your service, Thank You.

Terry L. :

Great. thanks for your questions, good luck to you. feel free to request me if you have any further questions.

Terry L. and other Bankruptcy Law Specialists are ready to help you