Will I get my money?

[mnewman943]

What is the name of your state? CA

My husband was in an accident. The man at fault agreed (in writing) to pay my husband $1000/ monthly for eight months. After paying half, he is now declaring bankruptcy and says he has no intention of paying the rest. He states that he did not list my husband as someone he is paying monies too. Do we have any form of legal action we can take against him? Or does declaring bankruptcy completely get him out of his responsibilities?

[SleeplessInMI]

Most likely you are out of the money. You could show up at his 341 meeting and make him it rough on him though. He is supposed to report all money being paid out before he filed for BK. So by not reporting it it will show that he is hiding things and the Trustee would grill him more...

But... if he does report it the Trustee can come after you to give him all the $4,000 back so he can divide it among all his other bills. Not only that but your agreement sounds like it might not be a legal agreement... $1,000 per month is alot of money and may be to much... I think that is called usery. I could be wrong though.

So you might just want to eat crow and let it go and be thankful for what you got so far from him...

[bigun]

He states that he did not list my husband as someone he is paying monies too.

This makes no sense. Unless the accident involves drugs or alcohol it's likely the debt can be discharged anyway.
When did he last pay and has he really filed bk?

[Who's Liable?]

Originally Posted by SleeplessInMI

But... if he does report it the Trustee can come after you to give him all the $4,000 back so he can divide it among all his other bills. Not only that but your agreement sounds like it might not be a legal agreement... $1,000 per month is alot of money and may be to much... I think that is called usery. I could be wrong though.

What?

If the person listed them as a creditor, why would the trustee go after them for the 4k that was paid? That's just like saying the trustee will go after the CC companies he paid to get the money back...

How can paying 1K a month be too much? If the person originally agreed to it, how is that usery? Remember, he agreed to this BEFORE he file BK...

The OP is a creditor and must proceed as such. They are entitled to what is theirs, assuming the trustee will give them anything...

As stated before, if the OP is a creditor, why in the world would the trustee demand money back?

[bigun]

I don't feel like looking it up right now but there is a section in the code that allows a trustee to recapture any payment over $600 made within 60 days of filing.
That section is aimed at preference payments to insiders. If you have a contractual obligation,{like the OP described} then the trustee will leave you alone.

[SleeplessInMI]

Well yes, if you pay a creditor $1,000 and then file BK a month later the Trustee can go after the creditor for that $1,000 to use it to divide it evenly among the rest of the creditors.. this is called preferential payments. This is the reason why alot of creditors will not accept payments from you if they think you are on the bring of BK.

Also, just because a person agrees to and signs a contract doesn't mean it is automatically legal. There can be conditions that make it illegal and unfair that would make it not stand up in court if it went that far. If you signed an agreement that you would jump off the Empire State Building if you failed to pay someone money but chickened out do you think you could get sued for it and forced to jump? No, because that is an illegal contract... even if you agreed to it and signed it. Though you would probably be committed if you signed an agreement such as that.

[bigun]

Well yes, if you pay a creditor $1,000 and then file BK a month later the Trustee can go after the creditor for that $1,000 to use it to divide it evenly among the rest of the creditors.. this is called preferential payments.


This isn't quite correct. If your mortgage payment is over $600 or car payment or utility bill,etc. is over that amount the trustee will not try and recover. You've a contractual obligation to pay.
Where you'll have trouble is, paying $1000 to a family member and the loan agreement was informal {pay me when you can} or some other insider where there was no contractual obligation.

OK, I looked it up.

[url]http://assembler.law.cornell.edu/uscode/html/uscode11/usc_sec_11_00000547----000-.html[/url]

(2) to the extent that such transfer was—
(A) in payment of a debt incurred by the debtor in the ordinary course of business or financial affairs of the debtor and the transferee;
(B) made in the ordinary course of business or financial affairs of the debtor and the transferee; and
(C) made according to ordinary business terms;

[mnewman943]

Thank you all for your help. It's amazing how someone who is unliscensed and uninsured can cause a family so much grief and still manage to get off without financial obligation. It's very disapointing that no more can be done.
Thanks though!

[bigun]

Has he actually filed bk? If not, you can sue him for the balance.
Sign up with pacer and see if he's filed. He damn well may be bluffing. If his income is above the median for your state, he won't be able to file a Chapter 7. In a 13, you'd get something.

[url]http://pacer.psc.uscourts.gov/[/url]