The topic on non-luxurious vs luxurious items, fraud and the use of credit

[TheBajan]

Lady,

I really appreciate your clear distinction between the morality and the law of this discussion. As you mentioned, the law says that continuing to use credit when you know you intend to file bk is fraud. Period. It doesn't matter what the purchase is for. Morality doesn't play into the action at all. Morally, we can debate all day (to no real good end) about what is right and wrong. However, what matters is what the law defines as fraud and our actions need to respect that or risk the legal consequences. Morally, the consequences of our actions are dictated by our own personal beliefs. We all deal with the right or wrong that we do and it's a separate issue entirely because we each define what is acceptable behavior based on our needs, desires, and beliefs.

Thanks again.

The Bajan

[LadyInTheRed]

Under ALL CIRCUMSTANCES stealing money from someone else is not ethical and that is how the Courts see it.

It is not the court's place to determine whether something is or is not ethical. They apply the law to a person's actions as proven by available evidence. Don't confuse morality with the law. They are two different things.

[LadyInTheRed]

The idea for this post was what I perceived as heavy reliance on the luxury vs. non luxury aspect of using credit up until the day of filing, that is, some individuals thinking that it is ok to use their card up until the time of filing as long as the purchases fall under everyday expenses. My position is to stop using the cards once you realize you won't be able to pay them back (for ethical and moral reasons) and to wait the 90 days to avoid unnecessary litigation. I do not condone nor encourage fraudulent use of credit.

I think your perception that members of this board rely heavily on the luxury vs. non luxury distinction to give people permission to use their credit cards is wrong. The majority (maybe even all) of active members on this board will give the same advice you do. When somebody comes here and says "I'm thinking of filing BK, can I still use my credit cards?", the prevailing response is always "stop using credit cards." Both because using them when you know you will file BK is fraud (regardless of what kind of charge it is) and because anybody who files BK is going to have to get used to making ends meet without using credit cards. The discussion of luxury items usually comes up when somebody wants to file BK, has already used a credit card and is worried that they may be accused of fraud. That's when we get into the discussion of what is presumed to be non-dischargeable under the bankruptcy code. It helps calm people who need to file BK but are fearful of the consequences of what they did in all honesty while trying to avoid BK. It is also often pointed out that the fact that a charge does not fall within the 90 day luxury goods and services category does not mean the charge was not fraudulent. It just means that if a creditor wants to dispute the discharge of the debt, it will have the burden to prove that the debt was fraudulently incurred, which is difficult.

Morals don't even need to come into the discussion. If you are going to file BK, stop using your credit cards for your own good and to avoid committing fraud.

But, we can talk about morals too. Morally, I can't think about an individual I borrowed money from the same as I do a bank, as you suggest. You can still pay off a debt that is discharged in BK. If I owed money to an individual, I would probably pay back the discharged debt when I could. But, the banks can eat it. An individual was kind enough to loan me money when I needed it. The loan was based on their personal relationship with me and their trust in me to pay them back. If I don't pay that money back, it could make a significant difference in their bottom line. When a bank lends money, it is based on a desire to profit. They check my credit report and decide whether to risk lending me money. They don't lend me money to help me out. In fact, they are more likely to lend me money when they think I don't need it. They know many people will default and they accept that as a cost of doing business. When I called the banks to say that I was having trouble managing my debt load and could they please reduce my interest rate that was much higher than when I incurred the debt, or just lower the minimum payments, they refused to help at all. If they had been willing to budge just a little, I might still be paying them every month instead of the Chap 13 trustee. They'd rather write of the debt then work with me to avoid it being discharged in BK. If I talked to an individual about being unable to pay money I owe, they may get pissed off, but they aren't nearly as likely to hound me for payments I can't make, sue me and garnish my paycheck or drain my checking account of cash I need to survive. They are more likely to take what I am able to pay them.

The banks don't worry about morals when they deal with us. Why should we care about morals when dealing with them?

Nobody should incur debt they have no intention to pay. But, when it comes to dealing with banks, I'm more willing to excuse a moral lapse.

[AngelinaCat]

1) When did you first consider filing BK?

2) When did you realize you were going to file BK?

3) When did you first contact an BK atty?

'Hub and I were not asked these questions at our 341, nor were they asked of the people that preceded us. That was in 2008. FF to October 2012, when 'Hub's ex-wife had her 341. She was not asked these questions, nor were any of the people that preceded her.

[mlsj2009]

k

[mlsj2009]

Sorry you took my comments personally. Unfortunately, moralists like yourself often do make things personal. That is the problem with them.
I have never filed for bankruptcy protection, don't owe anyone anything, and so far, always pay my bills on time. But I know except by the grace of God, there go I. Sorry, you are the one that's argument doesn't hold water. You want to pick and choose at your own convenience which is moral and ethical and who might be in their actions, or at least, that is what you write. Stealing? Really? I thought theft and stealing were a crime. If these people are stealing when they run up big debts on credit cards while knowing they might not be able to pay them back, maybe there should be a whole lot more in jail, don't you think. Debtor's prison died a long time ago, thank God. The business people you claim are being stolen from make it awful easy for credit card owners to steal, at least under your definition. Again, I am willing to allow the bankruptcy courts and criminal courts decide who is stealing and who is not. Personally, on a grand jury, in which I have served, I would laugh the DA out of the court house if he brought me one of the Mothers who "stole" a bottle of milk from a credit card. That is my point and the main thing I took issue with your comments. You may excuse yourself by alluding to $250 purchases to Walmart, but I don't. Sorry, that is just the way it is.

Thanks for your reply, a good dose of moral relativism. We use moral and ethics to guide every facet of our society. Your argument doesn't hold water, just replace Chase, Amex, or Bank of America with your back pocket...although you might have a degree of compassion I'd doubt you look kindly of me stealing from you. What if the money from the person your stealing from results in they themselves starving or losing their home? My post was NOT directed to those who are filing bankruptcy and have children starving to death but rather to those who go into, the "I am filing for Chapter 7 and I am going to get as much out of them as possible", or the "let me get that for you, I'm filing for bankruptcy" mode. I'd encourage someone who needed to "buy a bottle of milk" for their baby, at least in the US, to visit the Department of Human Services, their local religious institution even if they are not religious or ask a neighbor for help. I know of the stories, if God forbid I ever got to that point I assure you the last thing I would be thinking about is my creditors. Under ALL CIRCUMSTANCES stealing money from someone else is not ethical and that is how the Courts see it. Either way a $30, $100, or even $250 dollar purchase from Walmart is NOT going to initiate an adversarial proceeding barring some blatant "in your face" evidence. As I stated in my initial comments,



Yes, I am comfortable encouraging people to do the wrong thing when they or their children's survival depends on it....these situations are far and few. As I was reading through a lot of comments on the subject I saw many posters using the legal standing of luxury versus non-luxury as permission to continue to use their cards even after they had contacted their lawyer and begun the process, barring those who believe in moral relativism that's just not ok in my book.

[EandGWZ]

it is extremely doubtful, if an AP arose from the act of taking one's child, even one's self, for that matter to an ER because of serious illness or some similar situation, that even if an AP is or was filed. most likely a trustee would measure the level of what is considered fraud.

the burden of proof is on the creditor, and many times the standards are quite high, depending on what state you are in. an example of that, is this: when filing in the state and district we were in, the 90 rule simply was accepted by the the residing trustee...period. the trustee would not entertain any debt over 90 days whether it was charged or not. (i do understand since our filing, some of these AP's are now being examine more closely). however, my point, was at the time of our filing whether it was a luxury item or a trip to the er, it was disqualified since it was charged 90 days prior to filing.

again, getting back to proving "fraud". ones car breaks down needs 2k worth or repair or you will lose your job, home, your ability to care for your family, one knowingly and intentionally decides to charge the repair. what is the worse scenario? one would not be found guilty of fraud per se, however, at worse, have to pay back the debt.

Medical bills and authentic car repairs (get it up and running) not teeth whitening and new tires meet my standard of legitimate purchases. I would not expect someone to have to repay those, the consequence of bankruptcy is for many a severe enough consequence. I appreciate your reply, I think your qualifier that you'd pay them if you had to is an appropriate perspective.

[tobee43]

Thanks for your reply, a good dose of moral relativism. We use moral and ethics to guide every facet of our society. Your argument doesn't hold water, just replace Chase, Amex, or Bank of America with your back pocket...although you might have a degree of compassion I'd doubt you look kindly of me stealing from you. What if the money from the person your stealing from results in they themselves starving or losing their home? My post was NOT directed to those who are filing bankruptcy and have children starving to death but rather to those who go into, the "I am filing for Chapter 7 and I am going to get as much out of them as possible", or the "let me get that for you, I'm filing for bankruptcy" mode. I'd encourage someone who needed to "buy a bottle of milk" for their baby, at least in the US, to visit the Department of Human Services, their local religious institution even if they are not religious or ask a neighbor for help. I know of the stories, if God forbid I ever got to that point I assure you the last thing I would be thinking about is my creditors. Under ALL CIRCUMSTANCES stealing money from someone else is not ethical and that is how the Courts see it. Either way a $30, $100, or even $250 dollar purchase from Walmart is NOT going to initiate an adversarial proceeding barring some blatant "in your face" evidence. As I stated in my initial comments,



Yes, I am comfortable encouraging people to do the wrong thing when they or their children's survival depends on it....these situations are far and few. As I was reading through a lot of comments on the subject I saw many posters using the legal standing of luxury versus non-luxury as permission to continue to use their cards even after they had contacted their lawyer and begun the process, barring those who believe in moral relativism that's just not ok in my book.

it is extremely doubtful, if an AP arose from the act of taking one's child, even one's self, for that matter to an ER because of serious illness or some similar situation, that even if an AP is or was filed. most likely a trustee would measure the level of what is considered fraud.

the burden of proof is on the creditor, and many times the standards are quite high, depending on what state you are in. an example of that, is this: when filing in the state and district we were in, the 90 rule simply was accepted by the the residing trustee...period. the trustee would not entertain any debt over 90 days whether it was charged or not. (i do understand since our filing, some of these AP's are now being examine more closely). however, my point, was at the time of our filing whether it was a luxury item or a trip to the er, it was disqualified since it was charged 90 days prior to filing.

again, getting back to proving "fraud". ones car breaks down needs 2k worth or repair or you will lose your job, home, your ability to care for your family, one knowingly and intentionally decides to charge the repair. what is the worse scenario? one would not be found guilty of fraud per se, however, at worse, have to pay back the debt.

[tobee43]

I wasn't asked either of those. I also don't think those are questions that people here often say are asked. But, I am sure those questions would come up if a creditor did object to the discharge of a debt.

actually, were not not asked of those questions. i know you are/where a 13, and we were a 7. we were asked for id, what type of work ....but nothing about contacting our atty.

[EandGWZ]

The only problem I can see with your line of thinking involves your insistence you might think you know what is ethical and moral for the rest of us. I certainly agree with you that a person shouldn't use a credit card knowing they are committing fraudulent activity without ever having any intention of paying the money back. Nevertheless, as despritfreya alluded to in his post, bankruptcy laws can be very complicated and not always so black and white, just like ethics and morals can be.
As an example, would you be willing to accuse a family of fraudulent activity who has fallen on hard times and lost their jobs, cannot pay their credit any longer, but have small children depending on them? Should they buy that bottle of milk on credit so their baby can survive? It happens. I have read other similar stories on this forum.
Sorry, EandGWZ, but I am willing to leave it up to the bankruptcy courts to determine ethics and morals on what is or is not fraud. You have the right of your opinion of course, but I am very leery nowadays about perceived moralists and their opinions.

Thanks for your reply, a good dose of moral relativism. We use moral and ethics to guide every facet of our society. Your argument doesn't hold water, just replace Chase, Amex, or Bank of America with your back pocket...although you might have a degree of compassion I'd doubt you look kindly of me stealing from you. What if the money from the person your stealing from results in they themselves starving or losing their home? My post was NOT directed to those who are filing bankruptcy and have children starving to death but rather to those who go into, the "I am filing for Chapter 7 and I am going to get as much out of them as possible", or the "let me get that for you, I'm filing for bankruptcy" mode. I'd encourage someone who needed to "buy a bottle of milk" for their baby, at least in the US, to visit the Department of Human Services, their local religious institution even if they are not religious or ask a neighbor for help. I know of the stories, if God forbid I ever got to that point I assure you the last thing I would be thinking about is my creditors. Under ALL CIRCUMSTANCES stealing money from someone else is not ethical and that is how the Courts see it. Either way a $30, $100, or even $250 dollar purchase from Walmart is NOT going to initiate an adversarial proceeding barring some blatant "in your face" evidence. As I stated in my initial comments,

Now I am not getting on anyone who doesn't think this is good advice, I understand there are people out there who mere survival depends on the use of their credit cards. Each person's situation is unique so I am not judging anyone. Just thought I'd put it out there.

Heah, I'll be the first to encourage you to "stick it to them" and use any advantage under the law especially if you are starving or your children are suffering. I just think bankruptcy has personal implications which need to be considered in order to avoid having to go through the pain of being in debt again.

Yes, I am comfortable encouraging people to do the wrong thing when they or their children's survival depends on it....these situations are far and few. As I was reading through a lot of comments on the subject I saw many posters using the legal standing of luxury versus non-luxury as permission to continue to use their cards even after they had contacted their lawyer and begun the process, barring those who believe in moral relativism that's just not ok in my book.

[mlsj2009]

The only problem I can see with your line of thinking involves your insistence you might think you know what is ethical and moral for the rest of us. I certainly agree with you that a person shouldn't use a credit card knowing they are committing fraudulent activity without ever having any intention of paying the money back. Nevertheless, as despritfreya alluded to in his post, bankruptcy laws can be very complicated and not always so black and white, just like ethics and morals can be.
As an example, would you be willing to accuse a family of fraudulent activity who has fallen on hard times and lost their jobs, cannot pay their credit any longer, but have small children depending on them? Should they buy that bottle of milk on credit so their baby can survive? It happens. I have read other similar stories on this forum.
Sorry, EandGWZ, but I am willing to leave it up to the bankruptcy courts to determine ethics and morals on what is or is not fraud. You have the right of your opinion of course, but I am very leery nowadays about perceived moralists and their opinions.

The idea for this post was what I perceived as heavy reliance on the luxury vs. non luxury aspect of using credit up until the day of filing, that is, some individuals thinking that it is ok to use their card up until the time of filing as long as the purchases fall under everyday expenses. My position is to stop using the cards once you realize you won't be able to pay them back (for ethical and moral reasons) and to wait the 90 days to avoid unnecessary litigation. I do not condone nor encourage fraudulent use of credit.

[EandGWZ]

You'd better believe it.
I just love what this guy Lahm did tho. I mean he REALLY went to battle, taking on the big guys. He's a hero. There is a ton of stuff to wade thru on the site, but it's worth it.

I know, a bunch of consumers getting all excited because Chase's "hardship department" was willing to give them a less **** rate than promised as long as they closed their accounts. I remember clearly the day I called them, first time in my life I used foul language to a customer service rep...basically told me whether or not their decision resulted in me having to file for bankruptcy was my problem. Such backwards policy, remember when they attempted to charge a monthy fee to use their ATM's....what genius came up with that idea?

Please watch your language / frogger

[keepsmiling]

I know you were being sarcastic but the only people getting rich from that case are the lawyers.

You'd better believe it.
I just love what this guy Lahm did tho. I mean he REALLY went to battle, taking on the big guys. He's a hero. There is a ton of stuff to wade thru on the site, but it's worth it.

[EandGWZ]

See changeinterms.com. The Comptroller is well aware of the situation. I actually was going into Chase and leaving flyers from the site around with how dishonest they were---- back when I was first offended by this and feeling feisty.
I (and probably a few others here) am involved in the class action suit against Chase for this nonsense.
I'm sure I will get very rich from my settlement and be able to pay off all of my outstanding debts :P

I know you were being sarcastic but the only people getting rich from that case are the lawyers.

[keepsmiling]

Thomas Curry was involved in your case? Please do share! That must have been an epic case.

See changeinterms.com. The Comptroller is well aware of the situation. I actually was going into Chase and leaving flyers from the site around with how dishonest they were---- back when I was first offended by this and feeling feisty.
I (and probably a few others here) am involved in the class action suit against Chase for this nonsense.
I'm sure I will get very rich from my settlement and be able to pay off all of my outstanding debts :P