Just started filing for bankruptcy and a question about still charging on cards

[mistyz]

We haven't even filled out paperwork yet (will do it this weekend) but have given our attorney our first pymt. We are filing chapter 7. We are not behind on any payments, just owe a lot and can't keep up. Our attorney told us it is okay if we need to charge necessary things on credit cards before they are closed (or whatever the term may be). Is this true? We have money on cards and considering we have to pay the attorney 1800 dollars, putting some groceries and other items on a credit card is really what we are going to have to do while we can. I'm just nervous about doing it...anyone have experience with this? Did you still charge on any cards?

TIA

[tobee43]

welcome mistyz to the forum.

i'm not certain why your atty,or any atty for that matter would be telling you it's ok to charge anything on your cards at this point once he's/she's been retained.

if you charge within a 90 period prior to filing, the creditor can file a fraud claim which is done in a form of adversary proceeding. something you really do NOT want to deal with. each adversary procedure can cost you money as well if you lose, you will have to pay the creditor.

we would not ever think about charging ...ever, once our atty was retained.

we also paid up until the time of our filing, however, that can also be a problem since you are also NOT allowed to pay anyone during that time as well, as it would be considered preferential payments and can also cause you undue legal problems.

best of luck!! and keep posting with your questions!

[newbie2]

Wow. I'm dumbfounded. I guess your attorney is saying the credit card company won't file an adversary proceeding against you for groceries and such, but I've never heard of one stating to go ahead and use them once you know you are filing.

[mistyz]

Ugh! Thanks! :/

[newbie2]

misty, it's best to wait to file until you have the money for the attorney. Don't risk anything by using those cards anymore. You're still robbing Peter to pay Paul, and in this case, Peter is the bankruptcy trustee and your creditors.

[LadyInTheRed]

The attorney did not give incorrect advise. Many attorneys give more conservative advise, but that doesn't make this attorney wrong.

The use of a credit card within 90 days of filing is presumed to be fraudulent if you charge $600 or more to one card for the purchase of luxury goods or take cash advances totalling $700. This does not apply to charging basic living expenses that are not luxuries. A credit card company could still object to discharge of the debt, but they have the burden of proof that the charges were fraudulent and they aren't likely to bother for a few hundred dollars. They'll spend more money objecting to the the discharge than the amount that is at issue.

But, if you can't cover your living expenses without using credit cards after you have stopped making payments on your dischargeable debt, you have problems bankruptcy won't resolve.

[lillymarlene]

I accidentally used one of my cards shortly before filing for groceries. It was a small charge so nothing happened. My attorney however, when he found out, said to stop immediately, that sometimes that could be considered fraud.

[discouraged]

Why would you even take the risk? Just stop paying your cards and use that money for what you need. Why risk chancing it??

[tobee43]

Why would you even take the risk? Just stop paying your cards and use that money for what you need. Why risk chancing it??

exactly, why even take the chance??

with all due respect to some of the PPs, there are guidelines to follow once your have the intent to file. if you KNOW you're going to file and the courts find out your retained an atty and continued to charge, i just think there may be a better chance that for you to run into some type of unwanted legal issues to face.

bk is enough stress, and i really have never heard an atty tell someone it's okay to use one's cc's. and, yes, i have heard on this forum that people have used their cards in an emergency situation and it was a small amount and just made through the process without being noticed..............IF YOU WANT TO LIE.

one of the questions the trustee will ask you is:" When is the last time you used your credit cards?" (and there is a reason for that).

you are under oath, so if they find out you are untruthful, it may open up a bag of worms for you, EVEN if that bag is empty.