Chicago Preferential Transfers Laws
The bankruptcy has restriction of powers to give creditors the right of enjoying equal treatment. These powers allows the trustees to nullify transactions that favors one creditor and Chicago preferential transfers laws. Preferential transfers, fraudulent transfers, and the power to set aside particular liens are some of the avoidance power that the bankruptcy trustee have.
A preferential transfer is passing on or transfer of property or money to a creditor for the purpose of settling a debt when the debtor was unable to pay debts owed. It is speculated that the debtor was not able to settle debts owed ninety days before filing for a petition in bankruptcy. If the debtor is an insider or the transfer was made for the convenience of an insider, it is assumed that the debtor was insolvent between ninety days and one year.an insider can be a person close to the debtor like family and relatives. If the creditor gets more than what he or she could receive in a liquidation proceeding, the transaction is considered as a preferential transaction. In other words, the trustee considers a payment as a preferential transfer of assets when the debtor pays the debt before other creditors. A transfer is considered as a fraudulent if the payment is made with an intention of hindering other creditors from receiving payment.
The Law Offices of Joseph M. Tosti has years of experience in this practice area and can be of further assistance.