Paying Back People You Owe Before and After Bankruptcy
By Bankruptcy Attorney on Mar 25, 2007 in Bankruptcy Practice and Procedure, Colorado
For many reasons you should not pay people, relatives, and other Creditors back before filing a bankruptcy.
The greatest reason is that the Trustee has the ability to take the money back, so that one Creditor (includes relatives who lent you money and you paid back) is not preferred over another of similar status.
Generally, you can pay people back after a bankruptcy without consequence. However, you must speak with your attorney first to make sure you are not adversely affecting your bankruptcy.
Another problem with paying Creditors back after bankruptcy is that the Creditor may not want the money after writing the debt off or may not be able to track such payments. Additionally, these payments generally will not help your credit and may even hurt your credit if reported.
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