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Can the automatic stay in a chapter 7 bankruptcy force a…

Can the automatic stay in...
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?
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Answered in 7 minutes by:
6/16/2017
socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 40,074
Experience: Attorney and Real Estate Broker -- Retired
Verified

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.

I hope I've answered your question. Please let me know if you require further clarification. And, please provide a positive feedback rating for my answer (click 3, 4 or 5 stars) -- otherwise, Justanswer retains your entire payment, and I receive nothing for my efforts in your behalf. Note: If you cannot find the rating button on your webpage, please just type in your rating in a response to this note, and customer service will apply the rating for you.

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Customer reply replied 1 year 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 reply replied 1 year 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 reply replied 1 year 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.

I hope I've answered your question. Please let me know if you require further clarification. And, please provide a positive feedback rating for my answer (click 3, 4 or 5 stars) -- otherwise, Justanswer retains your entire payment, and I receive nothing for my efforts in your behalf. Note: If you cannot find the rating button on your webpage, please just type in your rating in a response to this note, and customer service will apply the rating for you.

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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 40,074
Experience: Attorney and Real Estate Broker -- Retired
Verified
socrateaser and 87 other Bankruptcy Law Specialists are ready to help you
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Errata: Should be Bankr. Code 522(h).

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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).

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