I am considering filing for bankruptcy after having been defrauded by a contractor. However, I'm not sure if paying back a recent loan from my father-in-law can be defended against being considered a preferential payment.
The loan was to pay for home improvements. I had the money in an escrow account. There wasn't enough money to hire another contractor, so I had to complete the work myself, and I wouldn't be able to receive the money until the work was completed.
I made an agreement with my father-in-law that he would lend me the money to pay for the improvements, and all money that I received from the bank would immediately go back to him.
This loan was made while I was insolvent.
Would this arrangement be seen as "ordinary course of ... financial affairs" under Section 547(c)(2)?
1 Answer from Attorneys
It may be problematic, but I would need to meet with you in person and to get more information from you. If you would like to discuss the matter in person, please call my office at 609-927-9227 and I will gladly make an appointment to meet with you to go over your matter in more detail.
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