Can my friend get sued for a loan I repaid her?

If you want to prevent the trustee from going after the money you should be prepared to litigate the matter before the bankruptcy court. This is really a case where you should be represented by an attorney.

You can probably pay the trustee out over time. Doesn't sound like you used a lawyer to file.

The trustee can recover the money because it is a preferential transfer. The bankruptcy code does not look at intent when there is a preference. Since she got more than she would have in the bankruptcy the trustee can sue to recover the funds. You can try to work out an agreement with the trustee for a lesser amount. You should contact a bankruptcy attorney to help you through this.

I would hang tight. It is unlikely that the trustee will actually sue your friend for this small amount of money, as the legal fees and administrative costs would not result in much of a distribution to your creditors. The arguments you make as to your intention and the source of repayment aren't particularly persuasive. You may wish to consult with other attorneys in your community about the reputation of the trustee assigned to your case as to whether s/he will follow through on this threat.

There are defenses to the preference rules...but typically the rule is that if a transfer of property is made during the time shortly before you file bankruptcy, the trustee can seek to recover the money, unless it can be exempted. You could amend your exemptions if the money falls under an exemption.The fact that the money was from a student loan does not affect the analysis because the money was not used for educational purposes. You can make an offer to the trustee that is less than he transfer. The trustee will incur litigation expenses and the sub $2,000.00 number will get eaten quickly...if you can offer another sum quickly, they may accept it.

You need to counsel with a bankruptcy specialist. It is doubtful that your friend will be able to keep the loan repayment, two years past due, unless you agree to pay it back into the bankrupt state. See an attorney with all the facts for a firm opinion.

It doesn't sound like there is anything you can do other than wait to see what action the Trustee takes. It sounds like only money will resolve this matter right now and you don't have it ($$). Your friend can always negotiate with the Trustee once her/she is sued.

Your friend will be sued regardless of all other factors you described. A good attorney should have disclosed this to you and explained to you how to avoid it.

You need to talk to your bankruptcy attorney. Your friend needs to talk to her own bankruptcy attorney experienced with creditor rights. But, most likely there will need to be some settlement reached with the trustee. It is these types of issues that make it imperative to talk to a good bankruptcy attorney before ever filing the case. If you live in Arizona you could have received free advice which would have helped you avoid this dilemma. I am sorry that you are in this situation.

You are not likely to avoid the preference litigation by exempting the property because you can only exempt assets you own. You don't need to pay anything. Your friend may need to. Your friend should negotiate payment of a smaller amount in settlement of the $1,950. To determine whether the Trustee can prove the preference claim, it would seem to be important to determine whether you were insolvent at the time you made the payment. In other words, were you able to pay your debts as they arose at that time? If the judgment you mention is what rendered you unable to make the payments, you may be able that were not insolvent and that the $1,950 payback to your friend did not render you insolvent and, therefore, defeat the preference action. Unfortunately, for you to do that, you will have to challenge the trustee to go ahead and file the lawsuit and defend, which is expensive if you hire an attorney. If you represent yourself, you will likely misunderstand some law or miss some deadline and lose. This is what the trustee is counting on that the transferee (i.e., your friend) will see that it is impractical for him to fight the Trustee even if he thinks he will win and instead pay the Trustee what the Trustee requests.