Fraudelent?

[gonunder]

I have been conisering filing chaper 7 for about a month now. I bought a house about a year ago, and there is very little equity built up in it yet (not sure of exact number).It's a $130K home.We live in Texas. We are married and would both be filing bankruptcy. We moved out of our mobile home (very cliche for TX,I know.) right before we moved into the house, and we defaulted on the loan for the mobile home.The plan was to have my sister buy it from me, she moved in, it all went downhill,they took mobile home. In the matter of about 2 months, we racked up about $7k trying to move, furnish a house, get utilities reconnected, buying groceries, having to buy lawnmower, microwave, etc the list is huge. Sure it was a little crazy and some was not needed, but we needed a LOT of things since we barely had anything in the other place, but we didn't think we would get in over our heads so quickly,we relied on money that didn't happen (i know, very stupid)

Anyway, so here we are with about $55K in total debt (incluing mobile home loan), and we want to file because there is no way we can pay it all back. My BIG problem is that for whatever reason, I had no idea that Amex didn't allow you to make minimum payments or even close to it. They want the WHOLE amount the next month. Stupid me. So, for a few months, I was making payments on everything, but making itty bitty payments (like $25) to amex because that's all I could do. I just wonder, if I haven't used any cc for a year, and for the first few months was making payments, then stopped of course, would they consider those charges in that 2 months fraudulent? I never spent money like that, it was very out of the ordinary for us, but we never had a new house to furnish either. I know it was unnecessary spending, but we wanted our new home to look nice.No excuse though.We never even thought about bankruptcy until a few weeks ago when we realized Amex and our mobile home laon were not going away.

Thanks for any responses.

[bkfiler]

well, if there is enough equity on the stuff you own to help pa your bills then then it could be sold by the trustee.

if your expenses are greater then your income, amongst other new laws applied, then you might have to file chap 13 instead to help pay off the bills.

as far as fraudulent, any charges within 90 days is considered 'fraud' adn can and probably will be challanged. anything past that its harder to prove 'fraud'. anything past 6 months gets a lot harder but can still happen. see the pattern?

past 1 year and its almost not gonna be an issue. but anyone at anytime can complain. its just that the longer it is in the past the less likey someone will complain.

[StaciMM]

There is alot about your situation (income, expenses, etc.) that we don't know-but about your question... The longer ago that your charges happened, the harder it becomes for the creditors to prove that you had no plans to pay back the debts. "Fraud" includes either 2 factors though... It could be ruled fraudulent if you were lacking in either ability or intent to repay. What I mean is that if you had reason at the time to think you would be ok, and then that changed, it could be argued that you DID intend to pay back.

A couple of good things to do over the next couple of weeks:

1. Make lists of everything... Debts, income, expenses. For expenses, try to account for everything, even if it seems minor.

2. Consult with 2-3 bankruptcy atttorneys. You'll want to discuss your situation in full, including everything in #1.

3. Read everything you can, here and elsewhere on the net, about BK. Learning what to expect is helpful in making an informed decision, and is also good if you do decide to file.