Q: Considering Ch7 but borrowed $700 from sister 9 mos ago to cover mortgage, repaid her a week later, do I need to wait

A: I think you have to wait the year unless you can exempt the money you paid her back using an exemption.

A: In the context of a Chapter 7 bankruptcy, repaying a loan to a family member, like your sister, can be considered an "insider payment." Insiders typically include relatives, friends, or business associates. Bankruptcy law scrutinizes such repayments made before filing, especially if they occur within a certain time frame before the bankruptcy filing.

The look-back period for insider repayments in a Chapter 7 bankruptcy is typically one year before the filing date. If you repaid your sister within this period, the bankruptcy trustee might view it as a preferential transfer. This means the trustee could potentially recover that money from your sister to distribute it among all your creditors.

However, the specifics of your situation, like the amount involved and your financial circumstances at the time of the repayment, can affect how this rule applies. It's also relevant that you were current on your other debts at the time and that the agreement was verbal.

Given these complexities, it's advisable to discuss your situation with an attorney before proceeding with a bankruptcy filing. They can evaluate the details of your repayment and advise on the best timing to file, ensuring compliance with bankruptcy laws and minimizing potential issues with your case.

Remember, each bankruptcy case is unique, and getting personalized advice is crucial to navigate the process effectively and make informed decisions.