Pre-Bankruptcy Payments can be Undone by Florida Trustees

  • Pre-Bankruptcy Payments

Pre-Bankruptcy Payments can be Undone by Florida Trustees

Call: 888-297-6203

The trustees in Jacksonville, Florida, can recover the funds made to the creditors by the debtors within 90 days of the bankruptcy filing, under the theory of “Preferential Payment”. This is done so that there is an equal distribution of those funds among all the existing creditors, which was earlier given only to one preferred creditor by the debtor.

In case the creditor is considered to be an “inside” (a relative or a friend) of the debtor, the 90 days period extends to 2 years. This 2 year period can also be extended in case an intentional fraud is found on behalf of the debtor.

The courts are unable to agree on whether a debtor is allowed to use the available exemptions on pre-bankruptcy payments made to creditors or not. Exemptions exempt some of the property of the debtor, which they are allowed to keep in bankruptcy. Under some jurisdictions, the debtor can use the remaining available exemptions for protecting their relative or friend from having to return the funds. Under other jurisdictions, those funds cannot be protected.

The debtor will always have the choice to file the money exemption on the petition and see if there is any objection on the debtor’s exemption claims from the trustee’s side. In case of no objection within 30 days of the bankruptcy filing, the claim of exemption will stand. For further assistance and guidance, contact the Recovery Law Group at or call them on 888-297-6203.