Your debt is spinning out of control. You know you have to do something, so you wisely have made an appointment at Steidl & Steinberg.
You may be on your way to resolving your situation.
There are some wonderful people who have tried to help you along the way, particularly your parents or a friend or relative. And you have managed to save up a few thousand dollars, not nearly enough to make a dent in your overall debt, but at least you can pay back your folks.
It’s not the wrong thing to do, as we all want to pay back our debts and your friends and family deserve to have their money returned to them.
Doing the Right Thing Could Hurt You
Don’t pay them back because it may tie your hands and the hands of your attorney if you need to file for bankruptcy relief. If you pay back a friend or relative or other insider (your boss, for example) any amount of money in the year prior to your filing for bankruptcy, it is possible the Court-appointed Trustee may have to get that money back.
What you have unintentionally done is given preferential treatment to an insider, and this gives the Trustee, in many cases, the right to get that money back and use it to divide among all of your creditors, not just your friend or relative.
The law is a bit more complex than that but, the bottom line is, don’t do it. Wait until you have met with us to discuss the options. In many, if not most cases, we have found that we can protect all of the money as long as you haven’t given it away.