San Jacinto, CA asked in Bankruptcy for California

Q: When selling business equipment should I use that money to pay bills before or after I declare bankruptcy?

My husband is selling his equipment, we plan on using the money to pay off some of our bills, but we would like to know if we should do it before or after we declare bankruptcy.

Related Topics:
1 Lawyer Answer
Ted A Greene
Ted A Greene
  • Bankruptcy Lawyer
  • Sacramento, CA

A: Do not pay large amount of money to family, friends, or credit cards before filing chapter 7 bankruptcy. These are considered "preferences" and the bankruptcy trustee will be able to take such money back and re-distribute to all of the creditors on a pro-rata basis. The amount of money that you have from selling your husband’s equipment can possibly be protected depending on your state exemption limits.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.