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  1. #1
    Join Date
    Dec 2014
    Posts
    6

    Default Fraud Transfer and Preferential Transfers

    My question involves bankruptcy in the state of: All

    FACTS:

    1) Creditor, received an $8700 check from Debtor to settle a $12,000 debt on 5/20/15.
    2) Debtor filed Ch. 7 bankruptcy on 7/31/15.
    3) Discharged on 11/2/15.
    4) On 2/24/16, Creditor received a letter from Trustee stating it has a "valid preferential transfer and/or fraudulent transfer claim" for $8700. Trustee offered to settle for $8200.

    How will this play out in Court if Creditor rejects the offer? Will the trustee actually file a claim or is this merely a letter writing campaign to drum up some money?

  2. #2
    Join Date
    Mar 2013
    Posts
    18,340

    Default Re: Fraud Transfer and Preferential Transfers

    Nobody can predict whether the trustee WILL file suit.

    He certainly has the power to do so.

    I seriously doubt that any creditor is going to reject the demand and risk the legal expenses of fighting it. At least not at that level.

  3. #3
    Join Date
    Sep 2010
    Posts
    478

    Default Re: Fraud Transfer and Preferential Transfers

    Quote Quoting jenk12
    View Post
    How will this play out in Court if Creditor rejects the offer? Will the trustee actually file a claim or is this merely a letter writing campaign to drum up some money?
    1. Trustee files suit to recover preference;
    2. Creditor given opportunity to file response/answer;
    3. If creditor has a defense to the suit, such as an "ordinary course payment" or "contemporaneous exchange", creditor better include it in the answer/response;
    4. Court decides. If no valid defense, trustee wins.

    If no real defense, creditor might want to make a counter-offer of say $5,000.00 and see where it goes.

    Creditor needs to review 11 USC 547.

    Des.

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