use of credit cards before bk

[glc4122]

yes i have a question about the ninty days or $600.00 amount. what happens if i use my cards in the preceeding 90 days before i file? do i have to pay this amount back? and also the $600.00 amount is this all totals of credit cards purchases or one purchase of $600.00?

thank you

[lrprn]

yes i have a question about the ninty days or $600.00 amount. what happens if i use my cards in the preceeding 90 days before i file?

By using your credit cards during the last 90 days before filing, you increase the chances that a creditor will file an objection to your case that you knew you were going to file and deliberately used the cards knowing you weren't going to pay them back. That's bankruptcy fraud and that's serious.

After 90 days pass without charges, that shifts the burden of proving you didn't file fraudulently from you to your trustee or the creditor. It's much harder for them to prove fraud, so not using your cards for the 90 days before filing is to your advantage.

do i have to pay this amount back?

If a creditor can prove you used your card within 90 days of filing knowing you were going to file, you will end up paying back at least the charges during the 90 days, and could end up not being able to discharge the entire amount owed to the card. Small charges for normal living expenses usually aren't worth the trouble, but where creditors are concerned, they hold most of the cards. Why take the chance?

If you can't live on what you make once you stop paying all your unsecured debt, fiing bankruptcy isn't going to help you very much. You will have to find a way to make more income or reduce your expenses more.

and also the $600.00 amount is this all totals of credit cards purchases or one purchase of $600.00?

The $600 amount has nothing to do with what is charged - the $600 is about making preferential payments to insiders or paying certain unsecured creditors but not others. A preferential payment is defined in the law as more than $600 total paid to any one unsecured creditor in the 90 days before you file.