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It can actually be the start of something good.
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Your attorney should be as well.

Preferential Transfer Actions

Creditors, wholesalers, and others who receive payment from their clients or customers typically have no reason to believe that those funds may be subsequently sought through legal action. Unfortunately, when these payments are made in the 90-day period immediately preceding a bankruptcy filing, the Bankruptcy Trustee may choose to pursue a preferential transfer action against a business. These legal actions can sometimes have severely detrimental effects on a business, as they may result in unexpected losses.

Bankruptcy law can sometimes be confusing and it is important to consult with an experienced bankruptcy attorney regarding your business’ rights. Contact Birmingham bankruptcy attorney Paula Greenway today at (205) 324-4000 if you have received a notice of a preferential transfer action.

Requirements for a Preferential Transfer Action

Preferential transfer actions are covered under Section 547 of the United States Bankruptcy Code. There are certain elements that must exist in order for a preferential transfer action to proceed, including:

  • The existence of an actual transfer
  • Creditor benefits resulting from transfer
  • The transfer addressed some previous debt
  • Transfer occurred during an insolvency period for debtor
  • Transfer occurred within 90-day term before a bankruptcy filing
  • Proof that the transfer allotted greater payment to the creditor than the creditor would have received under normal Chapter 7 bankruptcy

If a business that is being sued for a preferential transfer action can prove that even one of these elements does not exist, it may avoid a preferential transfer lawsuit, which can be a tremendous boost, financially.

Contact Us

If your business is facing a preferential transfer lawsuit, the help of an experienced Birmingham bankruptcy attorney can be especially important. Contact Paula Greenway today by calling (205) 324-4000.

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Greenway Bankruptcy Law, LLC
505 20th St N #1220
Birmingham, AL, 35203
Phone: (205) 324-4000
Tuscaloosa: (205) 737-3350
Gadsden: (256) 467-6650

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Greenway Bankruptcy Law, LLC All rights reserved. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. The following language is required pursuant to Rule 7.2, Alabama Rules of Professional Conduct. No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

Greenway Bankruptcy Law, LLC 505 20th St N #1220, Birmingham, AL, 35203 | Phone Number: (205) 324-4000