"Preferential Payment Bankruptcy" Discussion

Upsolve Community Member
Hi Christen, I am an Upsolver discharged in the summer of 2020 and NOT an attorney. I listed my son as a Creditor since he transferred a car to me and I was paying him $250 mo. --- my son received notification that I was filing bankruptcy.  (cont.)

Upsolve Community Member
What is important to the trustee in ALL bankruptcy cases, is "What does the debtor's financials look like?" so they can make their assessment. They want to know your assets and your liabilities, and they want to be FAIR to ALL CREDITORS LISTED in your bankruptcy. Therefore, in my education and research, I learned I had to be very careful in not making preferential payments to my son over American Express showing a potential bias. 

Upsolve Community Member
Yes! Mark's right, what's important to consider here is who is a creditor (and remember, all debts, even to friends and family, are generally required to be included) and if they've been paid back 

Upsolve Community Member
Here's a few resources that could help you navigate these questions and how they apply to your situation! https://upsolve.org/learn/preferential-payments-bankruptcy/ 

Upsolve Community Member
https://upsolve.org/learn/can-i-leave-debts-out-of-my-bankruptcy/ 

Upsolve Community Member
Thanks for asking! Before a debtor files for bankruptcy, it's worth considering if the payments they're making on their debts might be considered https://upsolve.org/learn/preferential-payments-bankruptcy/. 

Upsolve Community Member
After a debtor files, the https://upsolve.org/learn/what-is-automatic-stay-bankruptcy/ generally goes into effect and a bankruptcy filer generally no longer makes payments on their debts. However, they might still need to make payments on their other bills- this should help! https://upsolve.org/learn/bills-to-pay-after-bankruptcy/

Upsolve Community Member
Generally speaking, once someone has decided to file for bankruptcy, it's not a good idea to incur new charges on their credit card. Debts incurred with the intent to eliminate them by filing bankruptcy can’t be eliminated by filing bankruptcy. However, whether this becomes a potential issue for a bankruptcy filing really depends on how frequently and how much you charged.  You can learn more here! https://upsolve.org/learn/using-credit-cards-until-filing/

Upsolve Community Member
Anyone interested in preferential payments and how they may (or may not) affect their case, check out https://upsolve.org/learn/preferential-payments-bankruptcy/ in our Learning Center. 

Upsolve Community Member
Great question, Felix! For many, there's no "right" time though some things to consider are whether you're getting garnished now (filing sooner will stop the garnishment sooner) and whether you've had any https://upsolve.org/learn/preferential-payments-bankruptcy/ in the last 12 months. 

Upsolve Community Member
You might also find this helpful, Felix! https://upsolve.org/learn/should-i-file-for-chapter-7-bankruptcy/ There's information on waiting to file that could be helpful! 

Upsolve Community Member
Thanks for asking :) 

Upsolve Community Member
Hi Jose, It depends on which bills you're asking about- this article can help describe what to do about different types of bills you might have: https://upsolve.org/learn/bills-to-pay-after-bankruptcy/ Here is an additional article on credit cards to give you some guidance: https://upsolve.org/learn/should-i-keep-paying-my-credit-cards-if-i-am-going-to-file-bankruptcy/

Upsolve Community Member
Just remember that "preferential payments" aren't allowed- if you intend to file bankruptcy, it's generally not okay to pay some creditors but not others 

Upsolve Community Member
https://upsolve.org/learn/preferential-payments-bankruptcy/ There's more information on that here!