Legal Question in Bankruptcy in California

Re: A loan paid back to a friend before filing bankruptcy

There are many factors the Trustee will look at. First, do disclose the payment on your filing - I can't tell you how many people get themselves in trouble by omitting something that simple which, if disclosed, really wouldn't be a big deal. That being said, the trustee will look at timing - if the friend isn't an "insider", they are only going to look at payments made 90 days prior to filing. Second, the Trustee will look at the amount - is it worth spending thousands of dollars collecting $500? Not usually. Finally, the Trustee will look at the question of feasibility of actually collecting the money. We just successfully defended a preference action by a trustee over $100,000, because my client was judgment proof, and in the end, the Trustee realized it was fruitless to pursue the matter.

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Re: A loan paid back to a friend before filing bankruptcy

yes - unless it was so small an amount that the Trustee is not really interested (<$1,000 for example)