[CLBS] had this ? come up

[Randal French]

I take it the trustee is asserting a claim for recovery of a preferential transfer, so the defenses under 547 are available.  

Did the creditor have any kind of collateral arising from a consensual lien or a judgment lien?  If the creditor had a consensual lien on any assets, or had recorded the judgment and the debtor had real estate in his or her name, then the creditor may have had a valid lien and was entitled to payment in full from the real estate.  That defeats one element of the preferential transfer, that the creditor got more than it would have received if the assets were liquidated and the creditor, as a secured creditor, was paid in full.  If the creditor had a lien that was not avoidable, then the payment might be considered fair value for and a contemporaneous exchange for, the release of the lien.

Here may be other defenses available under 547 that apply to your facts.

On setting aside the satisfaction, I do not know that the creditor needs to set aside the satisfaction.  BR3002(c)(3) allows a person to file an unsecured claim which arises from a recovery of money or property.  That is what applies, in my view, from the trustee's recovery of a payment which paid the judgment in full.

Randy French
www.bauerandfrench.com


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-----Original Message-----
From: CLBS [mailto:clbs-bounces at admws.idaho.gov] On Behalf Of Aaron Tolson
Sent: Tuesday, July 23, 2013 10:12 AM
To: clbs-bounces at admws.idaho.gov; clbs at admws.idaho.gov
Subject: [CLBS] had this ? come up



for creditor attorneys: garnishment on the debtor paid the judgment in full, creditor files satisfaction and a couple of weeks later bankruptcy, trustee request most of the funds back- violation of the stay to set aside the satisfaction.  is there anything creditor can do

--
Aaron J. Tolson
2677 E. 17th St. #300
Ammon, ID. 83406
208-228-5221

This a privileged communication.  Please advise if you received it in error.
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