Legal Question in Bankruptcy in Illinois

if family has to repay money from defendant

My sister (53) filed for chp 7 in 1/02. She cashed in

2 CDs ($6000 total) in 6/01 & gave the money (in 6/01)

to my mother to repay my mother $13,000 which my

mother paid in 5/01 to pay off my sister's car.

Trustee now wants my mother to repay $6000 to court.

Does mother have to? Mom has paid $60,000 of sister's

bills already bec sister has mimumun wage job only &

mom felt guilty about debt. I stopped her from paying

all & directed sister to file bank but mom & dad just

retired & already have lost 1/3th of their SSA/pension

retirement money by paying sister's debts. How can the

court penalize Mom for having helped out sister & how

can it require Mom to repay money my sister gave her

back versus requiring any of sister's other creditors

from repaying back the money paid them during 4/01 -

6/01 (Credit card debts & car only). Would having mom

file as creditor protect her from this, or


Asked on 3/06/02, 6:02 am

1 Answer from Attorneys
Bruce Buckrop Bruce Buckrop

Re: if family has to repay money from defendant

It is called a preference, if a bankrupt debtor before filing got a tax refuned, and he owed a dentist$1,000. and a Doctor $1,000. would you say it is fair he paid one and bankrupt the other? the Bky law is supposed to be fair across the board and not allow a creditor even if it is a family member get paid more than another. After the trustee get the money back there will funds to get a dividend to all the unsecured creditors

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Answered on 3/06/02, 10:14 am


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