I need to file bankruptcy, but I owe my mom money.
Should I go ahead and pay her back before I file? I don’t want her to get hurt.
Will they come after my mom and sue her for the money? What should I do?

The answer to this question is a definite no. Don’t pay your mom or any other relative before filing bankruptcy because the trustee has the power to sue people that were paid before bankruptcy. The normal look-back period for these payments is 90 days. So if you paid somebody and then you file bankruptcy 91 days later, the trustee can’t go after that payment.

But there’s an important exception to this rule if you paid an insider, which is usually a relative, or it could be an affiliate company or a partner or somebody you’re in business with. In that case the trustee can sue that person to collect all the money they received from you during the year before the bankruptcy, and this can be a pretty devastating thing for the relative or the business partner that you paid.

The way to deal with this problem is to not pay them, file the bankruptcy and then pay them from the money that you’re either going to earn post-bankruptcy or part of the exempt cash you’re allowed to keep in the bankruptcy. The trustee can’t go after that money, they’ll be safe to collect and they won’t be sued.