What to do if a customer filed for bankruptcy but the court is trying to recover certain payments to us as “preferential”?

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What to do if a customer filed for bankruptcy but the court is trying to recover certain payments to us as “preferential”?

These payments were made in the normal course of business. Secondly they are using the check clearing date to determine the 90 day window rather than the payment date. Will I be forced to return the money? How can I successfully defend against this action?

Asked on March 18, 2013 under Bankruptcy Law, Illinois

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

So long as the payment to your business was done in the normal course of business and was made soon after invoicing then the payment to your business should not be deemed preferential by the court where you would be entitled to keep the money for goods or services rendered. I suggest that you consult further with a bankruptcy attorney as to the matter.


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