prefile info

[oicu812]

I am going to file but I want to make sure I dont have problems.

-if you use a cc that will be included in a bk,how much can be charged in the last 6 months? total charges or 1 charge
-what if a $575 item was charged 1 month prior?
-if I have to wait 60-90 days before filing because of these charges do I continue the min payments?
-why does one have to wait 60-90 days ?

all cards have been cut up when we decided we had no other options but to file

the info I have been reading here has been real helpful and has reduced my stress quite abit about filing and and life after bk

thanks in advance

Debtor oicu812

[LadyInTheRed]

Debt is not dischargeable if it is obtained by "false pretenses, a false representation, or actual fraud." (I'll refer to such a debt as "fraudulent" for simplicity). Any one charge or several charges on a credit card for luxury goods or services totaling more than $500 within 90 days of filing BK are presumed to be fraudulent. So are cash advances totaling $750 within 70 days. This does not necessarily mean a creditor will object to discharge of debt incurred within 90 days. It also doesn't mean a creditor can't object to a debt on the grounds that it was fraudulent if it was for less than $500 or incurred more than 90 days before filing. It just means they have to prove the debt is fraudulent rather than relying on the presumption that it is.

Waiting 90 days may be helpful to avoid some objections to dischargeability. Many attorneys always advise waiting 90 days after your last charge to file. But, waiting is not a guaranty against an objection by a creditor. If a creditor does object and wins, it means you will still have to pay that debt (and maybe the creditor's attorney fees). It does not effect the discharge of other debts.

Here's the Section of the Bankruptcy Code that deals with this issue.

§ 523. Exceptions to discharge
(a) A discharge under section 727, 1141, 1228 (a), 1228 (b), or 1328 (b) of this title does not discharge an individual debtor from any debt—
(1) [snipped. refers to taxes and duties. not relevant to this question]
(2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by—
(A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition;
(B) use of a statement in writing—
(i) that is materially false;
(ii) respecting the debtor’s or an insider’s financial condition;
(iii) on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied; and
(iv) that the debtor caused to be made or published with intent to deceive; or
(C)
(i) for purposes of subparagraph (A)—
(I) consumer debts owed to a single creditor and aggregating more than $500 for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable; and
(II) cash advances aggregating more than $750 that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be nondischargeable; and
(ii) for purposes of this subparagraph—
(I) the terms “consumer”, “credit”, and “open end credit plan” have the same meanings as in section 103 of the Truth in Lending Act; and
(II) the term “luxury goods or services” does not include goods or services reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor;

http://www.law.cornell.edu/uscode/usc_sec_11_00000523----000-.html

ETA: I just noticed this was your first post. Welcome to the board!

[kornellred]

I will hazard a guess and say that most attorneys who handle Chapter 13 cases will simply not file until it is certain that 90 days have passed since the debtor has used a credit card for any sort of purchase. I suppose it would be possible to file sooner than 90 days from the last purchase date, but that portion of debt would not be eligible for discharge and there would be endless and unnecessary complications in handling that debt.
Once you have decided that filing for bankruptcy is necessary, there is no point in making any more payments to any unsecured creditor. The waiting period is designed to preclude the presumption of abuse in Chapter 13 cases.
If a creditor can prove, beyond doubt, that the debtor acquired assets during insolvency, you can be almost certain of an adversarial procedure. That 90 days buffer makes it very difficult for a creditor to do that, because a lot can happen in 90 days.

[Flamingo]

We visited our attorney for a consultation in early February 2002. Up to that time we were robbing Peter to pay Paul, Tom, Dick & Harry and realized there was no way out and hubby was not going to get a decent job after losing it to a big company merger early 2001. Upon retention of the attorney a week later, we were advised to stop charging immediately, no transferring funds between accounts, etc. and stop making the car payments but to continue with our mortgage payments. We filed mid-April 2002.

Once you realize you have to file, why keep paying charge cards/using charge cards when one is broke? Stop the payments and the charging and use the money that you will have for not making those payments for incidentals, food, etc. until you can get things together by retaining counsel and filing. I realize the months of us charging and getting deeper in debt was stupid but at the time we were trying to stall for time so hubby could find a decent job - all we did was get deeper in debt.