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tleeders, Lawyer
Category: Family Law
Satisfied Customers: 2901
Experience:  18 Years experience. BBB Member. Chicago Bar association. Illinois Bar association
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I gave my brother a personal loan worth $100K . He has not

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I gave my brother a personal loan worth $100K . He has not been able to pay and is unemployed. I am 67 and retired recently and petitioned the court to reduce my life time alimony . I submitted to the court this loan in myStatement of Asset & Liability. What do I need to do so court will accept this as bad debt which obviously affect my ability to pay my monthly alimony obligation.
Thank you

Terry L. :

Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.

Terry L. :



Terry L. :

Alimony is based on need and means. Bad investments, especially to family, probably would not be considered to reduce your award. If you had a change in income, say from the job to retirement, that might be the better way to get the order reduced.


Terry L. :

You filed this question under bankruptcy, was that incorrect?



Hi am on my way out, could you please give me your answer for now we can chat later thank you

Terry L. :

The court would otherwise ask if you have sued your brother, and taken the steps necessary to protect your judgment, then freezing bank accounts, putting liens on assets, and garnishing wages.


Terry L. :

i have


Terry L. :

if you have followup questions, respond and I'll reply



Sorry to get back to you only now.

My brother has not filed bancruptcy to answer your first question. He might though since he is really under.

Correction, the scenario I told you before was hypothetical and I have not filed a petition to reduce my alimony. I am studying my options.


It is hard to sue your own brother, but I brought it up to him that I have no choice but to sue him. . On the other hand, the situation is also making my alimony position complicated.

On the bright side, the last time we talked, he said that

he could pay me $25K to settle the obligation. It is like when a cardholder offers to pays part of all total debt to the credit card co and they agree to forgive the balance. I will accept the payment , better than nothing if he files for banckruptcy.

How would the court take this settlement ?

Thank you.

Terry L. :

be careful on the timing.

If he files bankruptcy, he has to disclose payments to insiders (you) for a year preceding the case. So, the bankruptcy trustee can force you to pay the $25k back to the bankruptcy trustee. So, don't spend the money and make sure he waits a year to file, or else you'll be giving it back


Terry L. :

Let me know if you have any followups. Please rate 3 or higher for service for me to get credit for answering. thanks



Hi Terry,

I am comfused and need some clarification on:


1. What I understood is, If he paid me the $25K today, he must file bancruptcy Sept. 10, 2013 so the money paid to me will not be paid back to the bancruptcy trustee?

However, in case he filed before Sept. 10, 2013 , why will I have to pay back the bancruptcy trustee when the $25K is a payment for the debt my brother owes me?


2. When I asked you how will the court take the settlement, I was not referring to the bancruptcy court but to the one that will take up my alimony reduction petition.


So if I agree to the $25K to settle the $100K and my brother did not file bancruptcy , will the alimony court accept this settlement?

Will it be better that I send my brother a formal demand letter before I agree to his debt reduction proposal so the alimony court would see I did formally collect from him.?


I will give you the best rating.


Thank you.

Terry L. :

1. That would be correct

Payments to insiders for debts are preferences for a year. The trustee has the power to get these funds back, and distribute to all creditors. The court knows debtors would rather pay family and friends and discharge the credit cards and medical bills. so the rule is to make it fair for all creditors, not just family.

2. I cannot speculate how the court, or the opposition would take the settlement into account. I suspect they will not give it much weight. You have a court ordered obligation to pay, and if I was the other side, I would argue that bad investments with family should not be grounds to reduce the alimony. Now, you can always try, and if they don't mind, great. But if I was opposing counsel, I would strongly oppose a reduction for that purpose. Hope that gives you some information to work on. You should review all of this with your family law attorney before taking action.

Good luck to you.


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