Debt ro repay a family member

October 14th, 2009 by Questions

I have recently taken out a loan to pay my mother back for university because she has become ill and has lost her Job. My husband has also been released from his Job for medical reasons and our income has decreased. We are considering bankruptcy, but I am worried that they will look for the money back from my mother. That added stress would not be good for her medical condition and I don`t want to put her health at risk. Any advice would be greatly appreciated. Thanks!

Posted from: Ontario


One Response to “Debt ro repay a family member”

, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

You are right that this transaction will likely be an issue if a bankruptcy is filed.

The problem is that you have essentially paid off one creditor prior to bankruptcy and did not afford your other creditors the same treatment. To further complicate things it was done in favor of a related party. There is a very good chance that if you file a bankruptcy a court order will have to be obtained to demand the money back from your mother. Now you may be able to work around this by you paying the money back as part of the bankruptcy itself, but you will really have to discuss this with a local trustee.

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