not sure
I had a car loan with Honda. I sold the car and paid off the loan. With the leftover money I paid what I was owing to my daughter’s school and paid off some personal debts. I am now driving my ex-husbands vehicle until I can afford my own. I still have $18,000 in credit card debt and I need to claim bankruptcy. My question is this … will my creditors try to go after my friends and family that I paid the money to?
If you file for a bankruptcy what you have done will be considered a fraudulent preference and there are realistically 2 options. The first, and simplest option, is that you will be required to pay in the equivalent amounts of monies that you had received from the sale of the vehicle and were paid to your daughter’s school and the various personal debts. In the event that these funds are not returned it will then be your responsibility to make up any shortfall. The reason this is simplest is because it will have less of a consequence on other parties. The other option is that the trustee can get a court order demanding the return of the monies from the parties you paid off prior to filing.
Realistically, it makes no difference which option you choose as the creditors will only be concerned that the money comes into the estate. For more information on this you should discuss these options with a licensed trustee in your area.