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trustee calling my family

Date: Wed, 11/24/2010 - 02:50
Submitted by on Wed, 11/24/2010 - 02:50
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I had taken out some loans few years back. Last year I got some money and paid off some of the loans. In this regard, I should mention that I paid off those loans that were owed to my family. I was trying to pay off the loans owed to credit card companies also. Unfortunately, I got laid off in April 2010 and since then haven't found any other job. In such a situation, it is quite impossible for me to payback my creditors. So, I have filed Chapter 7 bankruptcy to discharge my debts few months back. Now the trustee is calling my family and telling them to return the money to the bankruptcy estate. How come is this possible? Can he really get the money back?


I must assume that you filed without the assistance of an attorney. That was your first mistake. The Trustee has the absolute right to recover payments made to insiders (family) if those payments were for repayment of loans and were made within the 1 year prior to filing. See 11 USC 547(b). Your family has no defense to the Trustee's actions therefore one of five things has to happen:

1. You step up to the plate and work out a repayment of the amount directly with the Trustee so he does not sue your family members.

2. Your family members try to settle with the Trustee for something less than what he is asking.

3. Your family members pay back the money.

4. Your family members do nothing and allow the Trustee to sue them, obtain a judgment and proceed to collect like any other creditor.

5. Your family members file their own bks - at which point the Trustee is nothing more than an unsecured creditor just like a credit card. OR

6. You meet with an attorney to discuss converting your case to a Chapter 13.

Des.


Submitted by despritfreya on Wed, 11/24/2010 - 04:28

despritfreya

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