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  • Spectacular!

    I liked your fast, friendly service. You were all knowledgeable in the area of bankruptcy. Your treatment of me as a client was spectacular! You were great at promptly responding to my questions and concerns. I loved that you provided courteous and quick responses to all my questions.
    --Donna
  • Highly Recommended!

    I have worked with Seth and he is the utmost professional in how he works with his clients. If you need an attorney you can trust I would highly recommend the Law Office of Seth Hanson.
    --David
  • Very Professional.

    Everyone was very professional and efficient. Seth, and everyone that I had contact with were very knowledgeable. I was very pleased with how we were treated by his staff. My questions were always answered promptly. I was very pleased with the service I received and would not hesitate to refer someone to your firm.
    --Anonymous
  • Non-judgmental.

    You were very open and answered all of my questions. You never made me feel like I was asking a dumb question. I was comfortable with your knowledge of the law. It was hard for me to make this decision to move forward in my life. Everyone was friendly to me and respectful. Non-judgmental. Every question I asked was answered promptly and appropriately. I would recommend you.
    --Anonymous
  • More Than Expected!

    I found the firm's representation to be more than what I expected. I was always kept in the loop, all my questions were answered (whether or not I asked more than once the same question), and I felt completely supported by the firm staff when going through this (at times) scary ordeal. Thank you again.
    --Joanna
  • Very Impressed!

    I liked that you had very friendly, caring staff. You were all very knowledgeable. Your treatment towards me was excellent and you quickly responded to all my concerns. If a friend asked of your overall impression, I would say that we were very impressed and we would recommend you to them.
    --Danielle

What Should I Do If I Owe Money To A Friend Or Family Member And Need To File For Bankruptcy?

When trying to repay their debts, some people will resort to borrowing money from friends and family members. What happens if you file for bankruptcy while you owe money to a friend or family member? Do they walk away with nothing? Is there any way to keep them from knowing about or being affected by the case? For many considering bankruptcy, maintaining personal relationships in the personal fallout of a case filing can be a source of stress. Unfortunately, many attempts at dodging this issue can often make things worse for you as well as for the people you intend to protect.

What happens if you simply leave your friend or family member out of the bankruptcy case filing?

You are required under penalty of perjury to list all outstanding debts in your bankruptcy schedules. When a creditor is listed in a bankruptcy they receive notice of the case filing from the court. If you wish to preserve your  relationship, you should talk with whoever you borrowed from about your intentions to file or let them know right after you have filed. You probably do not want the court to be the first to let your friend or family member know that they are a creditor in your bankruptcy case.

What happens if you quickly repay your friend or family member right before filing for bankruptcy?

If you cannot simply omit the friend or family member from your case, what about repaying the debt you owe to them just before filing? This might sound like an okay idea, in theory, but it will create issues later. In a bankruptcy case, a filer is required to disclose any significant payments to creditors in the 90 days before filing and the court-appointed trustee can “avoid” any previous transactions that would otherwise prejudice the other creditors in your case. “Avoid” in this context means that the trustee can take the money back from your friend or family member and then divide those funds up for all the creditors in your case. The situation can become even worse if the person
you repaid has already spent the funds because then they would be the ones who owe money to the court.

Payments to Insiders

Typically, trustees look at payments to creditors in the 90 days preceding your bankruptcy case filing; however, “insiders” are treated differently. The trustee can look back for up to a year before your case is filed for any repayments to an insider. People who can be considered “insiders” in your case include, but are not limited to immediate and extended family members of yours.

Although you are required to list your friend or family member as a creditor, a bankruptcy discharge does not prevent you from paying this person later. You would not be legally required to repay them and they could not sue you in an attempt to collect their debt; however, you can voluntarily repay them at your leisure after your case is
completed. Communication is the key here, because otherwise your friend or relative might not be sure if they are being repaid with little recourse available to them.

Do you owe money to a friend or family member and are considering bankruptcy?

Have you repaid them anything recently? You should discuss this with an attorney before you proceed with filing a bankruptcy case. To see how we can help you today, please feel free to reach out to your Yuba City bankruptcy attorney at (530) 797-4402.

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