October 2017 Archives

Defending Preference Claims in Bankruptcy

When a business files for bankruptcy, the trustee will sometimes sue creditors to get money back from them if they received a payment within 90 days of the filing of the bankruptcy. This is known as a preference action since the idea behind it is to avoid a debtor that is about to file bankruptcy from preferring certain creditors over others. However, there are defenses that can be used that may allow the creditor to retain the money they received within 90 days. For example, if the payment was made in the ordinary course of business such as within 30 days of invoicing, that may be a valid defense. If, after receiving payment, the creditor extended new credit, to the extent the new credit extended is not repaid, an offset will be allowed. There are other defenses as well. If a demand is received from a debtor or a trustee, it is important to immediately consult with an experienced attorney as there are time limits in responding once the complaint has been filed.

Risk for Cosigner When Bankruptcy is Filed

At one time or another, most people have been asked to cosign a loan. The request is made because the credit of the borrower prevents that borrower from getting credit on their own. When someone agrees to cosign a loan, they are doing more then just lending their credit. They are putting themselves at financial risk in the event the borrower does not pay. For example, if you cosign on a credit card and the borrower files a Chapter 7 bankruptcy and eliminates their own liability, the cosigner remains responsible for the entire debt. In certain circumstances, such as the cosigning of a car loan, if the borrower files bankruptcy but decides to keep vehicle and continue to pay, the cosigner is ok as long as payments are made. However, if payments are not made and the car is repossessed, you are liable for the deficiency. Before you cosign a debt for anyone, know the risks. 

EMAIL US FOR A RESPONSE

Get Our Help Today

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Office Locations

Cherry Hill Office
1060 North Kings Highway,Suite 333
Cherry Hill, NJ 08034

Toll Free: 800-759-0767
Phone: 856-254-2196
Fax: 856-414-1230
Map & Directions

Philadelphia Office
Suite 1505
1515 Market Street
Philadelphia, PA 19102

Toll Free: 800-759-0767
Phone: 215-928-9199
Map & Directions

Willingboro Office
200 Campbell Drive
Suite 103F
Willingboro, NJ 08046.

Toll Free: 800-759-0767
Phone: 856-254-2196
Map & Directions

Philadelphia Office
7909 Bustleton Avenue
Philadelphia, PA 19152

Toll Free: 800-759-0767
Phone: 215-928-9199
Map & Directions