Bank finance articles and tips

The issue of pre-bankruptcy transfers is discussed often; but most debtors aren't sure how a pre-bankruptcy transfer is determined to be preferential and reversible. Below are a few standards that bankruptcy trustees use when determining if a pre-bankruptcy transfer is preferential and needs to be reversed:

Does It Benefit The Creditor?

If a debtor simply paid their minimum payment on a credit card before filing bankruptcy, this would not be considered a preferential transfer because it doesn't really benefit the creditor. Well, it doesn't offer an extra benefit over what they would normally receive outside of bankruptcy. On the other hand if the debtor had two credit cards and paid one off while allowing the other to go into default before filing bankruptcy, the bankruptcy trustee might consider it a preferential transfer of assets....