Balance transfer to spouse's creditor prior to bankruptcy considered an insider pref?

[knowledge101]

I am declaring bankruptcy chapter 7 in the next month. I have made a few balance transfers about 4 months ago to a few of my wife's creditors. My lawyer says we have to disclose this as an insider preference as it "benefited" my spouse and is subject to the 1 year lookback period. However the way I see it my wife did not benefit, her creditors did. Shouldn't this only be subject to the 90 day preference period for creditors? My wife did not receive any cash, her creditors are the ones who received the balance transfer. My lawyer says that the trustee will likely not pursue the money from my wife because she has no assets (she is not filing with me in the bankruptcy), but at the same time I don't feel comfortable declaring this as a preference, because in my mind legally it was not an insider preference but a creditor preference. Should I get a different lawyer? Or is he right? I don't want to do the wrong thing but I don't want to land my wife in hot water for no reason

 

[justalayman]

He is right. You are wrong. Your wife benefitted by her debt load was reduced. Whether you gave it directly to her or to her creditor matters not.

 

[STEPHAN]

You lawyer is correct.

(Why do you have a lawyer if you do not trust him?)

 

[knowledge101]

Thank you, it is reassuring to have your consensus. I had to ask because my first encounter with him was not very reassuring. He seemed to second guess many things and had trouble remembering me from a phone call the day before. I know lawyers can be busy but you would expect as a client to at least have some details straight! Either way, thanks for the reassurance I just needed a second opinion.

 

[latigo]

I am declaring bankruptcy chapter 7 in the next month. I have made a few balance transfers about 4 months ago to a few of my wife's creditors. My lawyer says we have to disclose this as an insider preference as it "benefited" my spouse and is subject to the 1 year lookback period. However the way I see it my wife did not benefit, her creditors did. Shouldn't this only be subject to the 90 day preference period for creditors? My wife did not receive any cash, her creditors are the ones who received the balance transfer. My lawyer says that the trustee will likely not pursue the money from my wife because she has no assets (she is not filing with me in the bankruptcy), but at the same time I don't feel comfortable declaring this as a preference, because in my mind legally it was not an insider preference but a creditor preference. Should I get a different lawyer? Or is he right? I don't want to do the wrong thing but I don't want to land my wife in hot water for no reason

In "your mind" wifey didn't benefit as a result of you voluntarily paying her separate creditors? Where did you study logic? "Whatsamatta U" or "Elbonia State"?

I'll pass on asking for an explanation as to why you can sensibly argue that the payments should be treated as a Section 547 preference WHEN THE RECIPIENTS WERE NOT YOUR CREDITORS!

 

[knowledge101]

Please don't judge or assume. If you are an attorney I sure hope this isn't how you go about your cases. The situation is a bit more complicated, I obviously made this short to get a cut-dry answer. Originally I had Balance Transferred from a few of my wife's cards to my checking account to get some money I was trying to make back in the Stock market (which did not work out and originally lost after my cards were nearly maxed). After doing that I balance transferred to her cards because some of my cards did not give me an option to take the cash into my checking account. Long story short yes I can see the problem, but it wasn't some debt my wife incurred that I magically decided to erase. In our eyes it wasn't a preference because of these reasons but legally speaking I can see how it is an issue. My wife's finances and I are always entangled, we pay off each others debts using our checking accounts. We don't differentiate between "mine" and "hers"