The trustee sent me a letter or sued me, demanding money I received from the debtor. Can the trustee do this?

Yes. The trustee has many powers under the Bankruptcy Code, particularly Chapter 7 trustees. Money paid to you in the 90 days before debtor filed is potentially a preference. If you are a family member or business associate, this deadline extends for one year. In cases of fraud, the ability of the trustee to recover such transfers of money or property can extend for years.


Posted in: Creditor Rights in Bankruptcy