Legal Question in Bankruptcy in California

settlement prior to bancruptcy

If a settlement payment is made on an outstanding debt and the debtor subsequently files bancruptcy, when is the creditor required to return the settlement payment to the bancruptcy estate? Is it always required or only within 90 days(between payment of settlement and filing).


Asked on 10/23/01, 12:17 pm

1 Answer from Attorneys
Mark Markus Law Office of Mark J. Markus

Re: settlement prior to bancruptcy

If the creditor is not a relative or insider of the debtor, and does not meet one of the exceptions to preferences under 547 of the bankruptcy code, then he/she would have to return any payments made within 90 days prior to the bankruptcy case being filed.

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Answered on 11/22/01, 12:44 pm


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