Question

Are the preferential transfer rules that are applied in bankruptcy affected by whether an insolvent individual debtor filed a voluntary bankruptcy petition as opposed to an involuntary petition? Simply state ""yes"" or ""no.""

Answer 1

Answer:

YES

Explanation:

It is true that the preferential transfer rules that are applied in bankruptcy is affected by whether an insolvent individual debtor filed a voluntary bankruptcy petition as opposed to an involuntary petition.

A preferential transfer can only occur when an insolvent individual, before voluntarily filing for Chapter 7 bankruptcy, settles a creditor or a category of creditors which then implies that the remaining creditors will be entitled to less in the bankruptcy.