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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 39187
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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Can the automatic stay in a chapter 7 bankruptcy force a

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Can the automatic stay in a chapter 7 bankruptcy force a creditor to refund money that was collected just 2 weeks before the bankruptcy was filed?

Hello,

The automatic stay doesn't do what you are suggesting. Rather it is the bankruptcy trustee's power to avoid "preference transfers," under Bankr. Code Section 547(b), which are made within 90 days of filing bankruptcy.

However, there are many exceptions to this rule, and sometimes, even where there is no exception, the trustee will not want to pay the legal expenses necessary to force a turnover of property by a creditor. So, while the law exists to force such a turnover -- this does not mean that the turnover will actually be required or possible to accomplish.

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Customer: replied 4 months ago.
My "creditor", the Social Security Administration, is withholding money from my monthly retirement payments to recover an overpayment they made to a 3rd party beneficiary I was the registered payee for. The SSA's own policy say I am due a refund for any collections they made the month I filed. I brought the matter of the refund to the attention of the Trustee. She says she can't advise me and I should get a lawyer.
Customer: replied 4 months ago.
It seems I'll have to get the judge to make a ruling of this issue if the SSA don't voluntarily refund the money, $600.
Customer: replied 4 months ago.
I'll reference the Bankruptcy code in my pleading to the judge. Is there another other reference I can use?

Bankr. Code 522(f) -- applies to exempt property, such as Social Security retirement income.

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Errata: Should be Bankr. Code 522(h).

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