Are cash advances nondischargable in Chapter 13?

[startover05]

I know cash advances and luxury purchases made in last 60 are persumed non-dischargable in chapter 7 but can they be discharged in a Chapter 13?

[hhou812hh]

I know cash advances and luxury purchases made in last 60 are persumed non-dischargable in chapter 7 but can they be discharged in a Chapter 13?

It can be in a ch13, but it still depends on how much they were and what were they used for. If it was a couple of grand for an emergency item, etc. then it "should" be ok. If you borrowed like 10k and used it for luxury items then the trustee may not like it since it looks like a bad faith filing.

Speak to a lawyer and see what they will say since they usually know the local trustee.
Good luck!

[startover05]

I am so confused, everyone seems to give a different answer including legal counsel. Is there anyway to know for sure?

[HHM]

Exceptions to discharge are controlled by 11 USC 523 whether your BK be a chapter 7, 11, 12, or 13.

If the cash advances were large enough, used for luxury goods, and made within 60 days prior to filing your chapter 13, they are presumed fraudulent and cannot be discharged. In a chapter 13 context, what that means is they have to be paid in your chapter 13. Creditors can still object on other grounds as well.

[hhou812hh]

I am so confused, everyone seems to give a different answer including legal counsel. Is there anyway to know for sure?

You didn't answer the 1st question so it's hard to answer. What was it used for? If you own a house and took out a cash advance to fix the leaky roof or replace the old furnace then the courts may understand. Also if you made large purchases/cash advances within the 4 months and filed because of a job loss the courts would understand that as well. If you purchased a plasma TV or a vacation or a new Harley then that's a different story even in a ch13.

If you think you will have trouble you would probably be better off waiting it out as long as you can and file under the new law. While it's more strict then the current law it may be your only option if you can't afford to pay your debts.

[concerned]

If the cash advances were large enough, used for luxury goods, and made within 60 days prior to filing your chapter 13, they are presumed fraudulent and cannot be discharged. In a chapter 13 context, what that means is they have to be paid in your chapter 13. Creditors can still object on other grounds as well.

How large matters? For example, if you charged a few hundred dollars before you realized you would have to file--Is this a problem? Can you simply agree to pay what you charged under this scenario?

[hhou812hh]

How large matters? For example, if you charged a few hundred dollars before you realized you would have to file--Is this a problem? Can you simply agree to pay what you charged under this scenario?

This should be ok. If you charged 20k a month or so before filing and file a ch13 and the best interest/best effort test shows that you can pay back maybe 10k over the life of the 13 the courts won't like this and may dismiss (at least my atty said so). If you have a few hundred or so that's nothing to worry about. They will get that back under your plan.