Legal Question in Bankruptcy in California

Re: Bankruptcy Preference cases

It is not an issue of whether the debts are dischargeable or not. The preference rules are a very different issue and have to do with you gettign paid out of the ordinary course of business with the debtor. If you have been served with a lawsuit already you should hire an attorney to explain the rules and see if you have a good defense; there are some defenses, but they have to do with your relationship with the debtor not the nature of the debts.

Re: Bankruptcy Preference cases

Custom fees and taxes are not only non-dischargeable, usually, but are also priority debts. Priority means a debtor can pay these debts before he pays other debts that do not have the same or higher priority. Very few debts have a higher priority than taxes. Also the fact that this money did not go into your pocket, but to another entity is a good defense too. So you may have a legitimate defense here.

However, any fees you received for services may not be considered priority, and could possibly be percieved as preferential transfers. In order to provide you with a more accurate answer any attorney would have to see the documents and discuss the case with you in detail.

You should take this case seriously, as if you do nothing, the consequences could be not good.