Downpayment with credit card(s)

[freshstartfl]

.. and honestly, who wants to worry about something coming back on them like that? Isn't worth the risk, IMO, no matter how well it's planned out and/or timed.

[liz417]

I knew someone that used a CC's convenience check, deposited it in her account, purchase a car for her son, (not to mention all the other fraudulent 'purchases' she made), KNOWING that she was goint to declare BK in the near future (ch 7 about 10 years ago). Several creditors showed up at her 341 to challenge A LOT of her 'purchases'...and although, she was discharged, she had paid back those creditors that proved fraud. I believe if you do something like this...it WILL come back to bit you in the A**!!!

[freshstartfl]

Despite what constitutes legal fraud by definition, the intention is to do something fraudulent. That's where the problem lies. There's ways you can handle it that you may very well "get away" with it, but it's still an intentional defrauding of those creditors. I don't advocate that by any means, but at the same time, where would the burden of proof lie? On the creditors, to prove you intentionally defrauded them? Or on you, to prove that you didn't? I don't know the answer to that question.

[2Bshinyandnew]

Also, Car dealers are not supposed to accept more than $1000k on a credit card for a deposit. When I bought my last new car and wanted to put $5k down the dealer only would accept $500 on my credit card and I had to pay the balance by check.

Something like that may be a policy of an individual dealership, or maybe this could be overseen by state regulations, but not a blanket "rule" or law about car dealerships in general. I know folks in my state who have used CC to pay a lot more than $1000 at a dealership for a car, one friend even did the entire transaction, about $10K on a credit card to buy a used car (no BK involved).

[debtmonster]

One one of our cars we made one payment since the last charge, but the cards have not been used. We defaulted on everything. The lawyer told me flat out to stop payments on EVERYTHING, so I did.

[ansky0007]

Yes, Debit cards are different.

[rjl0206]

I used a debit card for a $3k down, lawyer ok'd it since it was a debit, and yes will be filing around june. Lawyer also told me flat out that since I now have an intention/plan of filing bk I SHOULD NOT use any cc's etc any longer. Doing so would be regrettable as he put it, BUT!! as long as I have paid minimums for 3 months from the las tcharge he also said screw them and dont pay back a dime from here on, so yes, all that cash I was forking over monthby month helps alot....

Ray

[debtmonster]

Also, Car dealers are not supposed to accept more than $1000k on a credit card for a deposit. When I bought my last new car and wanted to put $5k down the dealer only would accept $500 on my credit card and I had to pay the balance by check.

That would eat $150 out of their profits for you to put $5,000 on a credit card.

[ansky0007]

Also, Car dealers are not supposed to accept more than $1000k on a credit card for a deposit. When I bought my last new car and wanted to put $5k down the dealer only would accept $500 on my credit card and I had to pay the balance by check.

[Dst1]

Would it really considered fraud - 8 months from now? I thought the presumption of abuse/fraud is limited to 6 months or less.

No, that's not true. The legal presumption of abuse is only three months (90 days). But if the Trustee suspects fraud, they can look back as far as four years.

After six months, it's less likely the creditor will object; but they still can. I suspect that for 2.5K, that the creditors are not likely to object after eight months, particularity if he has been making the minimum payments.

[Dst1]

If the person got laid off with no fault of their own and had no plans of filing bankruptcy, then it would be okay. But this is a planned scam. Not good.

Exactly. This is the key, planning.

Of course, just because its been admitted on this board don't mean it's legally fraud; that has to be proved in court. But from an ethical POV, it's fraud.

[debtmonster]

If the person got laid off with no fault of their own and had no plans of filing bankruptcy, then it would be okay. But this is a planned scam. Not good.

[southernbelle]

It sounds like fraud to me. Entering into a deal like that with the intent of filing BK (even though it's more than 6 months away) is still fraud. Not to mention the fact that this type of behavor is helping to cause the innocent to suffer. See the attached link: http://www.bkforum.com/showthread.php?t=34073

If your neighbor has the misfortune of getting a tough Trustee like I have, he/she will wish they would have left that $20k car on the lot. Tell them they should look into buying they can buy outright and stay away from the cc's.

[JRScott]

I agree if the trustee gets wind of such a deal it will be seen as fraud I'm pretty sure. I would not recommend them doing this.

[debtmonster]

Yep... that's fraud. I financed many cars and had many repo's and what not, but I was always up front and honest on my credit application. Whenever it asked for income, I always put in my current income at the time.

People have no business buying $20,000 dollar cars if they have to charge all of those down payments like that. This sounds like a person in their early 20's doing something so irresponsible.