We receibed $690 towards an antecedant debt owed us from an employee within 90 days of the employee filing bankruptcy. The employee was not an insider.
Chapter 7 Bankruptcy Attorney
Avoidable preferences take up a whole Bankruptcy Code section at http://www.law.cornell.edu/uscode/text/11/547. I cannot give a short answer about whether a bankruptcy trustee will consider the $690 receipt an avoidable preference worth pursuing for benefit of all unsecured creditors rather than just one.
To answer one question that you've asked: Certain transfers to a creditor adding up to $600 or more within 90 days before the bankruptcy petition is filed are avoidable in their entirety, not just to the extent they add up to more than $600.
If you want to know more about the meaning of certain key words used in bankruptcy, see the federal courts' web site for a glossary of bankruptcy terms: http://www.uscourts.gov/Common/Glossary.aspx.
My law firm is a federally designated debt relief agency and helps people in Colorado file for bankruptcy relief under chapters 7 and 13 of the Bankruptcy Code.
7 lawyers agree
Concur with Robin, the amount is recoverable in full assuming it is an avoidable preference.
To be an avoidable transfer, certain requirements must be satisfied. Robin outlined the statutes involved. If you have a trustee demanding payment, you have 2 options (1) pay the trustee and be done with it, or (2) hire an attorney to review and possibly fight it...however, it will likely cost you more to hire an attorney then to simply pay the $690.
5 lawyers agree
Chapter 11 Bankruptcy Attorney
I concur with the others. There is no minimum threshold for avoiding preferential payments. But the reality is that many trustees would not seek to avoid a payment that small because it costs them far more money to fight for it.
4 lawyers agree