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Repayment of Debt – Not a Preference as the Transfer Did not Enable the Defendant to Receive More Than She Would Have If the Transfer Had Not Occurred.

New Mexico, September 26, 2017 – Debtor and her son were involved in a car accident in August 2015. Debtor struggled to pay rent and other bills, or work after the accident. A defendant, (the Debtor’s mother) loaned the Debtor $775 per month from January 2016 through October 2016. The Defendant got this money from her retirement account. The Debtor planned to pay her mother back when she receives money in settlement of her car accident claim. At some point before October 13, 2016, the Debtor received a settlement check and on the same date, the Debtor paid the Defendant $7,685 towards partial or payment of the $9,300 loan. Subsequently, the Debtor filed for bankruptcy and the Trustee brought a motion for summary judgment against the Defendant alleging that the repayment of debt was an avoidable preference. Since the Trustee did not provide admissible evidence that the transfer enabled the Defendant to receive more than she would have if the transfer had not occurred; the Court held that the summary judgment for the Chapter 7 Trustee was not warranted

Mazel v. Encinias (In re Encinias), Nos. 16-13058 ta7, 17-1013, 2017 Bankr. LEXIS 3277 (U.S. Bankr. D.N.M. Sep. 26, 2017)


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