Can I repay my relatives before I file for bankruptcy?

February 1, 2012

You could do that, but it would be a VERY bad idea.  You see, there are special rules that apply to loans repaid to relatives.  You cannot treat Mom better than Visa or Mastercard.  Any money repaid to a relative in the 12 months prior to the filing of the bankruptcy can be taken back by the bankruptcy trustee. That money will then be used to repay some of your other debt.

There is nothing which prevents you from voluntarily repaying any creditor once your bankruptcy case is over.

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