Your question reveals a dangerous ignorance about bankruptcy law. Depending on how much and when was paid to your niece, it may well be a recoverable preference. Ms. Bunce is correct that it almost certainly is not any kind of an exemption.
If you are attempting to navigate the complicated and perilous bankruptcy law without capable legal assistance, this is your wake-up call. The cost of the legal services you need is small in comparison to the cost of the damages you can irrevocably cause yourself. If you do not know a competent bankruptcy practitioner, use the attorney-finder at www.nacba.org.
Best wishes for a favorable outcome, and please remember to designate a best answer.
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PLEASE consult with a bankruptcy attorney! If you paid "too much" money to your niece, the BK trustee can demand that she pay it to HIM, so he can give it to your creditors. Good luck.
Be sure to designate "best answer." If you live in Oregon, you may call me for more detailed advice, 503-650-9662.... more
Be sure to designate "best answer." If you live in Oregon, you may call me for more detailed advice, 503-650-9662.
Please be aware that each answer on this website is based upon the facts, or lack thereof, provided in the question. To be sure you get complete and comprehensive answers, based upon the totality of your situation, contact a local attorney who specializes in the area of law that involves your legal problem. Diane L. Gruber has been practicing law in Oregon for 26 years, specializing in family law, bankruptcy, estate planning and probate.
Note: Diane L. Gruber does not represent you until a written fee agreement has been signed by you and Diane L. Gruber, and the fee listed in the agreement has been paid.
You cannot claim an exemption in this case, as you no longer possess the cash and the transaction was completed. The trustee will demand $ from your niece, or worse, sue her (if it is worth the time and money). Preference payments to insiders are scrutinized 1 yr back. When did you repay her? was this repayment of a loan or support payments? support payments in the ordinary course would not be subject to this. You definitely need an attorney!