Central District Consumer Bankruptcy Attorney's Association

To the extent any money was then paid to creditors, there would be
preferences if within the time period. If the debt settlement firm is
holding money for the debtor, it is the debtor's property before the filing
and the estate's property after the filing.
If you have any questions or concerns, please contact me.
Pat
Patrick T. Green, Esq.
Fitzgerald & Green
Attorneys at Law
1010 E. Union Street
Suite 206
Pasadena, CA 91106
Tel: 626-449-8433
Fax: 626-449-0565
pat@fitzgreenlaw.com

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Listmates,
Debtor has been making payments to a debt settlement firm prior to
coming to me for bankruptcy.
1. Are those payments preferences?
2. If these payments are preferences, does the ordinary course of
business defense apply? On the one hand, these are regular scheduled
payments. On the other hand, the entire concept of settlement is
outside of ordinary course of business.
3. If these are preferences, and no defense applies, this claim could
be scheduled and (in the case of this particular debtor) exempted.
Does the bankruptcy code prevent the chapter 7 debtor from recovering
preferences he voluntarily paid out?
Thank you,
Alik Segal
Alik.Segal@gmail.com
310-362-6157
Cal. CD, Los Angeles

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