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Negative equity in car - preference payments - Chapter 13
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I dont see how this creditor is receiving more by this alleged preferential transfer than it would receive in a hypothetical Chapter 7 case (i.e. Section 547(b)(5)). In a Chapter 7 case, this secured creditor would be entitled to full payment on its claim.
Also, if the preference is only $360 per the Trustee, then it does not meet the over $600 threshold in a consumer case per Section 547(c)(8).
Frank X. Ruggier, Esq.
Certified Bankruptcy Specialist *
15545 Devonshire Street., Suite 110
Mission Hills, CA 91345
Tel: (818) 796-3529
Fax: (818) 561-3909
* certified by the State Bar of California Board of Legal Specialization
The post was migrated from Yahoo.
Chapter 13 trustee says that car payments made in the 90 days prior to
filing are preference payments because there is negative equity in the car.
(Negative equity was rolled into new car loan when old car traded in.)
I want to argue that negative equity was paid off prior to the 90 day
period, but trustee said payments were applied pro rata. Example: negative
equity was $3,000 at time of purchase of new car; car payments $400/month,
negative equity paid off in 7.5 months. Filed BK 5 months later. Trustee
says no. If secured portion was $10,000, and negative equity was $3,000,
then $400/month allocated 30% to negative equity and 70% to secured
portion. $3,000/$10,000 = 30% This means that $360 was a preference. Is
there a rule on this?
Holly Roark
Certified Bankruptcy Specialist*
*and Sports Lawyer*
holly@roarklawoffices.com **primary email address**
www.roarklawoffices.com
*Central District of California & District of Idaho* - Consumer Bankruptcy
Attorney
1875 Century Park East, Suite 600 Los Angeles, CA 90067
T (310) 553-2600; F (310) 553-2601
*By State Bar of California Board of Legal Specialization
Chapter 13 trustee says that car payments made in the 90 days prior to filing are preference payments because there is negative equity in the car. (Negative equity was rolled into new car loan when old car traded in.)I want to argue that negative equity was paid off prior to the 90 day period, but trustee said payments were applied pro rata. Example: negative equity was $3,000 at time of purchase of new car; car payments $400/month, negative equity paid off in 7.5 months.,000, and negative equity was $3,000, then $400/month allocated 30% to negative equity and 70% to secured portion. $3,000/$10,000 30% This means that $360 was a preference. Is there a rule on this?
The post was migrated from Yahoo.