avoidable?
Posted: Tue Oct 25, 2016 12:35 pm
I hate to bug you all, but I'm hoping you'd have an answer as I need to
leave for hearings and have a client/debtor hounding me over it: a
creditor and the debtor more than 1 year before the petition date (but less
than 2) agreed that the debtor would default on a collection case and the
creditor would get a judgment for let's say $200,000 and the Debtor then
made weekly payments against the debt (which they also privately agreed to
settle for a lower amount) for many months after that. The creditor's debt
is really a few tens of thousands of dollars less than the amount of the
judgment, but the creditor convinced the debtor that letting her have the
judgment lien would allow her to protect him from other creditors (of which
he has many for similar transactions as the secured judgment creditor).
The lien cannot be avoided as a preference because of the timing, but can
it be avoided under 548 or the 544? Because of the agreement, it would
seem it was actually fraudulent and because the amount owed was less than
the amount of the judgment, the debtor received less than equivalent value.
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