Line Of Credit
We are getting ready to file bk (Ch 7) and we have not used any of our credit cards since March when we did a lot of balance transfers and moving money around. My question is that we have a line of credit on our checking account that is there for overdraft protection. It automatically kicks money into our checking account and covers checks written so they don't bounce. Then when we get paid, the money gets transferred back to the line of credit to pay it back. I did not even think about this, but will this be considered "Preference payments"? And since we did not close it, it has been used recently (like I said it happens automatically without us having to do anything other than making our checking account balance go to zero, which it often is these days cos we have no money!) so will this cause a problem if we try to file now, or will we have to wait some more time and not use it? This is stressing me out (but will be seeing a lawyer v soon).
Answer:
I haven't seen trustees in MD or DC treat this type of account as a preference.
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