Credit Card Use During Six Months B4 Bankruptcy--Question

[jessiediamond]

I'm starting to understand that credit card use in the six months before bankruptcy may lead to that debt not being erased.

I use one credit card (and one only) for my regular, day-to-day life. I don't buy anything but the standard, low-dollar items: groceries, gas, etc.

Should I be worrying about these kinds of purchases for six full months prior to a bankruptcy? And consequently, should I switch to cash-only, if I can, for the next six months?

TIA!!!!

~jessie

[jenopher]

I would stop using them now. My atty said necessities won't cause any concern. So far, no creditors have objected to anything. We are 6 days out from the 341, so they still could object, but we are not talking huge dollar amounts, so we THINK we are fine.

[catdance23]

If it's day-to-day expenses you should be OK but to be on the safe side don't use your cards anymore and stop paying the CCs. You'll start to get harassed but once you file they have to stop calling you. Keep paying on anything you plan to keep though. For example, if you are going to reaffirm your car keep making those payments.

[BassBoy]

Most definitely stop using the CC's. Although day-to-day expenses may not casue any concerns, this is more of a "protect your a$$" kind of thing.

Just to note: It's the big items that you charge, like luxuries, that can warrant a creditor objection.

[Help!]

Yes, continuing to use credit cards while simultaneously planning your BK can be construed as bad faith. Cover your a$$.

[justplaintired]

yeah small dollar purchases aren't the problem, it's the luxury items that could cause you a problem. Also if your filing, stop using them, it's time to learn to live on a budget, good practice for your future with no cc. I actually don't mind not charging, it's very rewarding going to the store and paying cash!

[duplantisjj]

yeah small dollar purchases aren't the problem, it's the luxury items that could cause you a problem. Also if your filing, stop using them, it's time to learn to live on a budget, good practice for your future with no cc. I actually don't mind not charging, it's very rewarding going to the store and paying cash!

I agree! At first I thought I could never get by without the occasional cc charge but after 6 mths of no cc use, I rather enjoy paying up in cash and knowing I have no worries later.

Plus it made a big positive note at my 341 when the UST asked me when was the last time I used a cc. I said at least 6 mths, he said great! You've made the adjustment to living smarter.

[halloweendmb1]

how much money are you talkin about monthly?

[momof5]

The biggest concern would be if there was an objection (by a different creditor even). How do you explain your continued use of credit to the BK judge? One of the greatest defenses that I have read about was the fact that a person did not use any credit cards while contemplating a BK. Which in itself can help prove that there was no intent to fraud.
May sound a little far fetched and chances are pretty good that it won't be an issue. BUT if you want to go into this with a clear mind and a "clean plate" your best bet would be to discontinue the use of this card.

[Stilltheone]

We filed in March and actually charged a trip to Florida over Christmas....about 3 months before we filed.

I would stop using the cards. Every trustee and credit card company is different.

Good luck!

[jessiediamond]

Really? Six full months without the credit cards? It would seem that necessity use wouldn't be a problem three+ months prior to filing. I mean, it's not a certainty I'll file six+ months from now: that's a long way off!!

At the same time, it is a good idea to start budget living now!

Thanks for the comments!

Jessie

[Priceless ProSe]

Dont think of it in terms of, will I get in trouble. Think of it as, why am I using these cards when I know I will never pay it back? WHat would I say if the trustee asked me why I was using cards that I didnt plan on paying back (which he/she wont, but creditors might).

[jessiediamond]

As I mentioned, I don't *know* what will happen seven months from now. It's one alternative, particularly if I don't get a new job.

If I filed today and a creditor asked why I was using credit cards seven months ago, I'd say because I was alive and trying to keep my life going.

Jessie

[Cali]

If you aren't paying the CC's you are filing on, you should have money freed up to buy the things you need. If you don't have any free money after not paying the debts you want to discharge, then there is more problems than using a CC.