Central District Consumer Bankruptcy Attorney's Association

I prefer to prepay things that have actual bills first, such as paying
the entire 6 month premium of insurance instead of doing it month by
month.
For rent, if the period is close enough that the Debtor will be
occupying the premises during the administrative phase of the case, I
don't think the trustee can ask for the money back as the prepaid value
would have been used.
Steven B. Lever

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Hello Pat:
I think you're on the mark with a fraudulent transfer. Trustee could sue the landlord to return some of the prepaid funds. Until the monthly rent obligation kicks in, after all, the landlord is just acting as a banker, and holds debtor's money on deposit.
- John
________________________________
To: cdcbaa@yahoogroups.com
Sent: Wednesday, April 2, 2014 3:01 PM
Subject: RE: [cdcbaa] Prepaying rent
John:
Others may have more insight, but my two cents is:
It is not a preference, but arguably a fraudulent transfer as it is intended to hinder or delay the creditor, but probably just good-faith pre-bankruptcy planning. Thus the estate owns the right to occupy or sublease for part of a month? What can the trustee do with that?
If you have any questions or concerns, please contact me.
Pat
Patrick T. Green
Attorney at Law
Fitzgerald & Green
1010 E. Union St. Ste. 206
Pasadena, CA 91106
Tel: 626-449-8433
Fax: 626-449-0565
pat@fitzgreenlaw.com
From:cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] On Behalf Of John Faucher
Sent: Wednesday, April 02, 2014 2:40 PM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Prepaying rent
To the group:
Client wants to prepay rent, then go into a chapter 7. The prepayment will obviously be an asset of the estate, and disclosed as such on schedules. Some of it may not be exempted, as he'll use up his wildcard exemptions elsewhere. How likely is it that the trustee will pursue the landlord for the prepaid rent? How many months would it be safe to prepay? I'm assuming rent of $2,500 a month. And I'm remembering that pigs get fat, hogs get slaughtered.
My thought is that it depends on the trustee, but most trustees don't go after assets that will net them less than $3,000. So prepaying two months and leaving it unexempted is starting to tempt the trustee.
Any other thoughts out there?
- John D. Faucher
818/889-8080

The post was migrated from Yahoo.

John:
Others may have more insight, but my two cents is:
It is not a preference, but arguably a fraudulent transfer as it is intended
to hinder or delay the creditor, but probably just good-faith pre-bankruptcy
planning. Thus the estate owns the right to occupy or sublease for part of
a month? What can the trustee do with that?
If you have any questions or concerns, please contact me.
Pat
Patrick T. Green
Attorney at Law
Fitzgerald & Green
1010 E. Union St. Ste. 206
Pasadena, CA 91106
Tel: 626-449-8433
Fax: 626-449-0565
pat@fitzgreenlaw.com

The post was migrated from Yahoo.

To the group:
Client wants to prepay rent, then go into a chapter 7. The prepayment will obviously be an asset of the estate, and disclosed as such on schedules. Some of it may not be exempted, as he'll use up his wildcard exemptions elsewhere. How likely is it that the trustee will pursue the landlord for the prepaid rent? How many months would it be safe to prepay? I'm assuming rent of $2,500 a month. And I'm remembering that pigs get fat, hogs get slaughtered.
My thought is that it depends on the trustee, but most trustees don't go after assets that will net them less than $3,000. So prepaying two months and leaving it unexempted is starting to tempt the trustee.
Any other thoughts out there?
- John D. Faucher
818/889-8080

The post was migrated from Yahoo.