90 day waiting period?

[MEA2]

Do you need to have 90 days clear from purchasing anything on your credit cards in order to file BK?Can someone explain this rule to me?
Thanks

[miss puff]

That is the general rule. If you are charging right before bankruptcy it shows that you are using your credit and you don't have any intention to pay it back. Could be looked at as fraud. My best advice would be to not charge at all at least 90 days, if not longer before you file.

[lrprn]

That is the general rule. If you are charging right before bankruptcy it shows that you are using your credit and you don't have any intention to pay it back. Could be looked at as fraud. My best advice would be to not charge at all at least 90 days, if not longer before you file.

Miss Puff is right on target. - the 'no charges for 90 days' rule is to avoid the appearance of fraud. There are some minor exceptions - if you use a credit card for small "necessities of life" such as food, necessary clothing, gasoline, and similar items, and the amounts charged are relatively minor, it is unlikely that the court will see that as fraud. Still, it's best to not use any credit cards or increase any unsecured debt within 90 days of filing if you can avoid it.

Another 90 day prior to filing rule to keep in mind is that you must treat all of your creditors equally during that time. In other words, you aren't permitted to pay one non-secured creditor $500 and others nothing merely because you were hoping to protect one creditor from suffering a loss. If you pay any creditor $600 or more over and above the amount you would normally have paid it, the excess amount can be recaptured by the Trustee and redistributed to your remaining creditors.

Good luck - keep us posted on how your pre-bk planning is going.

[SinkingFast]

That's $600 in the aggregate (total) in the last 90 days, per unsecured Creditor.

If the total of your last 3 monthly payments to any unsecured Creditor exceeds $600/Creditor, the Trustee is gonna go after the money.

One attny made it sound like it was no big deal for us. That it was between the Trustee and the Creditors. Another attny explained the process better.

The Trustee will call for a special Hearing which will involve you, the Debtor Filer. You must attend. Not sure what happens at the Hearing, but I didn't wanna learn that part.

Just be sure that you don't pay any unsecured Creditor $600 or more within 90 days of filing. That's $600 per Credit line. Not a total of $600 to all your unsecureds.

[lrprn]

Just be sure that you don't pay any unsecured Creditor $600 or more within 90 days of filing. That's $600 per Credit line. Not a total of $600 to all your unsecureds.

Thanks for explaining this better than I did, SF - appreciate it and I'm sure NJ does too.

[SinkingFast]

In the New Law, there's a 70/90 day rule regarding CC use.

70 days and $700, I believe for Cash Advances and Convenience Checks use. If you use the Cash Advance features of your CC within 70 days of filing and the $$ amount exceeds what's allowed, it could look like fraud.

90 days on CC's purchases. There's a $500 limit there if I remember correctly.

Within the 70/90 day periods, the burden of proof that you used your Credit fraudulently falls on you. After the 70/90 days, the burden of proof shifts to the Creditors.

[djk]

That's $600 in the aggregate (total) in the last 90 days, per unsecured Creditor.

If the total of your last 3 monthly payments to any unsecured Creditor exceeds $600/Creditor, the Trustee is gonna go after the money.

One attny made it sound like it was no big deal for us. That it was between the Trustee and the Creditors. Another attny explained the process better.

The Trustee will call for a special Hearing which will involve you, the Debtor Filer. You must attend. Not sure what happens at the Hearing, but I didn't wanna learn that part.

Just be sure that you don't pay any unsecured Creditor $600 or more within 90 days of filing. That's $600 per Credit line. Not a total of $600 to all your unsecureds.

this was not my experience. I remained current on all accounts except one right up to the date of filing. 3 of the accounts had payments in excess of 200 bucks for each month for the the prior 3 months. truth of the matter is I went belly up (so to speak) real quick and everything reflected that and the trustee I had expressed no problems at all with my situation. Each case is different, from the trustee to how you manage the bankruptcy. The amount of time elapsed from the moment I made the decision to file to the postmark on the petition?
6 days.

[aa06a47]

My trustee wanted to go after Citi because I had paid them more than $600 in the prior 90 day period. Since I was only making min payments to the creditor and it added up to more than $600, the trustee dropped his plans to go after the credit card company for the money. However, he did have the attorney amend my plan to state "any money recovered be added to the "pot" amount".

Had I paid Citi more than the min payments, he would have probably went after them. I'm sure it varies trustee to trustee though.

[SinkingFast]

The 90 day rule must be under new law? We filed under old law and it was only 60 days................?

Or does that vary from state to state?

Yep! It's New Law.

And evidently by both DJK and Aa's experiences, whether or not the Trustee will go after the money varies from Court to Court.

Guessing from what attnys here said during Consults, the Trustees in our branch will go after the money.

When we met with, and hired our attny, he asked about payments to Creditors. By that time we were at 3 missed payments all around. Our attny said "Good! We don't have to worry about the $600 aggregate payments."