If my parents filed for bankruptcy but 10 months prior paid me a that I was debt owed, can the tructee ask for it back?

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If my parents filed for bankruptcy but 10 months prior paid me a that I was debt owed, can the tructee ask for it back?

About 12 months ago my parents lost their jobs and received severance payment. At that point, they gave me $11,000 to pay a previous debt they owed me. I have since spent this money on tuition, etc. My parents filed for bankruptcy 2 months ago. Now the trustee is requesting that I turn over the money stating that the transfer was either preferential or fraudulent. My parents and I had no idea they were going to file for bankruptcy when they paid me back. Am I obliged to return give the money back?

Asked on March 21, 2012 under Bankruptcy Law, Florida

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Yes, you might be.  Please seek legal help here.  The trustee can deem the trasnfer of funds as preferential to a family member made with in one year of the filing of the bankruptcy petition nd force you to pay the money back to the bankrupt estate.  Get legal help.  Good luck.


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