Legal Question in Bankruptcy in Florida

Re: Chap. 7 Bankruptcy

The question that you have posed is basically "Must I wait 160 days before filing bankruptcy because I paid some creditors and not others?"

There are two considerations here. The first is whether you have made what is called a "preferential trnasfer." A preferential transfer is when you pay a lower priority creditor without paying a higher priority creditor. For example, paying your credit card (unsecured) before paying the IRS (priority creditor) or your house payment (secured creditor). If you pay creditors out of order then the Trustee make file a motion to have those creditors disgorge (pay back) that money to the Trustee so that it can redistributed to the benefit of all unsecured creditors (reallocate the payment into pro rata shares). This process has very little to do with the discahrgeability of the debt itself.

The second consideration does have to do with dischargeability. If you have used any of these credit cards recently (i.e. within 6 months), then the creditor may file a motion to determine that their particular debt is non-dischargeable because you borrowed the money with the intention of filing bankruptcy. That is what generates the problem, not payments.

As an aside, if the payments you sent were reasonable (your required monthly minimum due or close to it), then even the payments should no cause too much of a stir unless the overall amount is large.

To learn more about the bankruptcy process, you should check our website at www.LaBellaLaw.com.