Can a secured creditor be required to return any payments received after the bankruptcy filing and any payments received up to 90 days prior to the filing?
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Can a secured creditor be required to return any payments received after the bankruptcy filing and any payments received up to 90 days prior to the filing?
Asked on September 28, 2012 under Bankruptcy Law, California
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Under fedral bankruptcy laws, the only time a payment to a creditor can be ordered to be repaid by the bankruptcy court to a creditor as a preferential payment is if the payment was paid to the detriment of other creditors where the creditor to be allowed to keep such would be inherently unfair.
Assuming the payment in this ninety (90) day period was to a secured creditor of the debtor for a legitimate debt, the chances for the creditor to return the payment to the trustee seems remote.
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