Luxury Purchases before filing? Need advice

[timgt]

Ok, I just started the process of a chapter 7. I just got a lawyer in the last 2 weeks. Here is my question that I am a little worried about. I read that anything over $500 in luxury purchases in the last 90 days can be considered fraudulent and they can deny the discharge of that creditor.

Here is the problem, 2 months ago I purchased a $200 tablet, and 1 month ago I purchased a $450 cell phone at full retail because I wasn't eligible to upgrade. This equals $650 for the 2 items in the last 90 days.

I have also paid my credit card bill those last 2 months, $450 a month. So it wasn't like I had no intent to pay it back. I guess I really have 3 questions,

1. If the credit card company disputes it, will the entire credit card balance be non-dischargeable or just those items that i bought in the last 90 days?
2. If I payed $450 a month does that wipe out $450 dollars for the cell phone purchase?
3. Am I screwed to the point where I have to wait another 90 days now?

[LadyInTheRed]

Welcome to BKforum!

Ok, I just started the process of a chapter 7. I just got a lawyer in the last 2 weeks. Here is my question that I am a little worried about. I read that anything over $500 in luxury purchases in the last 90 days can be considered fraudulent and they can deny the discharge of that creditor.

Here is the problem, 2 months ago I purchased a $200 tablet, and 1 month ago I purchased a $450 cell phone at full retail because I wasn't eligible to upgrade. This equals $650 for the 2 items in the last 90 days.

I have also paid my credit card bill those last 2 months, $450 a month. So it wasn't like I had no intent to pay it back. I guess I really have 3 questions,

1. If the credit card company disputes it, will the entire credit card balance be non-dischargeable or just those items that i bought in the last 90 days?

Only the charges made in the last 90 days, assuming those are the only charges the bank claims are non-dischargeable.

2. If I payed $450 a month does that wipe out $450 dollars for the cell phone purchase?

Only if there wasn't a prior balance.

3. Am I screwed to the point where I have to wait another 90 days now?

The safest thing to do is wait 90 days. Is there some reason you can't?

Waiting isn't essential. The worse that will happen is the $650 debt will not be discharged. The bank probably won't bother disputing the discharge of such a small debt. It also may be that one or both of those items aren't considered luxury purchases. But, if the bank does file object to discharge, fighting the bank will cost more than $650 in attorney fees, so you'd probably just let them have their way.

Talk to your lawyer and get his advice on this issue. That is what you paid him for.

[timgt]

Thanks for your quick responses!!

It's good to know that only the $650 would be non-dischargeable if anything and its not the total 16k credit card debt I have.

I know waiting is best but for me, waiting may not be best. I just had a major operation (got part of my right lung removed) and have been out of work 3 months, then just recently started back to work on light duty. So for the last 3 months I have had 0 paychecks come in. Now that I started back to work I will start getting paychecks again but because of the months out of work I will still be sooooo behind on everything. It just seems like the right time for me to file is now before money starts coming back in even though I am way under the median anyway.

[keepsmiling]

Welcome and best wishes for a full and quick recovery!