Chapter 7 bankruptcy: your knowledge base

Are you aware of the 90 day rule in bankruptcy filing? If you are unsure about what it is, then seek the advice of the Bankruptcy Attorneys for clarification. It is certainly not advisable to rely on friends, family, or the internet because while some says that the 90 day rule, or preferential rule as it is also called, prohibits the debtor from paying any bills during the time period up to the bankruptcy. On the other hand some thinks that the rule typically means they should not buy anything leading up to the bankruptcy. In fact many are simply unclear as to how it works. For the uninitiated, the 90 day rule allows a trustee in a Chapter 7 bankruptcy to recover payments the debtor made on any one of their debts if the payments were made in the 90 days prior to filing bankruptcy.

As per the Bankruptcy Laws the 90 day or preferential rule is not meant to penalize debtor conduct. This is basically a bankruptcy specific statute and some state laws have pretty clearly mentioned whether a debtor can pick and choose among his creditors which ones to pay and which ones not to pay. By bankruptcy legislative act, payments of more than $600 in the 90 days prior to filing Bankruptcy Foreclosure to one creditor can be looked at. Every trustee in fact has their own rule of thumb about when a preference can and should be recovered this amount would be well over the $600. The point I want to make here is that you need to run anything and everything by a Business Bankruptcy lawyer for clarification to avoid any problems down the road.

There are manifold advantages for filing bankruptcy which is why so many people seek this as an option to their financial situation. Prior deciding on Filing Bankruptcy in Massachusetts you need to take some time to figure out all of the positives and negatives as well as other options. Sit down and have a consultation with an experienced bankruptcy attorney in your area also, keep in mind the main reason for filing Chapter 7 bankruptcy in the first place is to come out debt free.

This content has been taken from: http://www.zimbio.com/Bankruptcy+Service/articles/MLm7TM1djY8/Chapter+7+bankruptcy+90+days+rule?add=True