Legal Question in Bankruptcy in California
Paying off student loans first.
My wife and I owe 90k on credit cards and 75k in student loans. Our cash is running out, and we were just about to declare bankruptcy, when my father sent us a check for 50k out of the blue to help us out.
I've been out of work for over a year now due to health issues, and my wife is taking care of our two year- old daughter.
Are we allowed to put the 50k to the student loans and then declare bankruptcy to resolve the credit card debt?
1 Answer from Attorneys
Re: Paying off student loans first.
The 50k payment to student loans would be considered a preference, even if they're most often not dischargeable. In addition, you'd have to declare the 50k as additional income. It might make more sense to use the 50k for health care and living expenses.
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