Credit card lawsuit?

[DYLAN150]

I know that if a person takes a cash transfer from a credit card within 70 days of filing bankruptcy this is consider fraudulent. I have read that some trustee's like to see at least 6 months of payments between the transfer and the filing of bankruptcy. But what if the person does not file bankruptcy, is it consider fraudulent if a person takes cash from their credit card and only makes a payment or two and can not pay? Is this consider fraudulent? My cousin took $2500 to buy a motorcycle and a month later lost his job. Now he is wondering how he is going to pay his bills. Will the credit card companies sue for fraud?

[mtbc]

If he didn't expect to lose his job, I'd have hoped that that change of circumstances would be a good defense against an allegation of fraud, explaining why he can no longer pay. I can't advise about that actual case, but from my layman's view that change of circumstances looks material.

[BKDefender]

I'd have to agree with MTBC. To prove fraud they're going to have to prove that at the time he took the money that he was unable to, or knew he was unable to, pay the money back. If he could make payments when he took the money out, then lost his job, it doesn't look like fraud nor do I think they're going to be able to prove actual fraud.

--William

[nickifan]

I'd have to agree with MTBC. To prove fraud they're going to have to prove that at the time he took the money that he was unable to, or knew he was unable to, pay the money back. If he could make payments when he took the money out, then lost his job, it doesn't look like fraud nor do I think they're going to be able to prove actual fraud.

--William

BKD, thank you for your helpful presence on this board.

What about this scenario...you have a good amount of savings in the bank but no job. You deplete your savings to pay your expenses (including CC debt) as you keep looking for a job. You take a $3K cash advance on a card knowing you are looking for work. That is more than six months ago now, you kept paying the card, and charged nothing further.

You are still looking for work and things are VERY grim, which is why you are planning to file BK at this point.

Now...one assumes there is no way the CC companies could know your circumstances --i.e. no employment. Is there a way they COULD find out once you file? And then...could they say, "You didn't have a steady INCOME (as opposed to the dwindling savings account)...everything you charged in the time you've had no job is fraud"?

This is one reason I now avoid 99% of the CC calls (I take the "first" one on a newly late card) and probably said too much in the beginning. Just today I decided to answer a few (to buy a few days' of ringer peace) and they always ask "did you lose your job? WHEN?" "Were you self-employed?" "Do you get unemployment?" I now politely reply that the "details of my situation are irrelevant; I do not have predictable income at this time and cannot make a payment."
It had occurred to me that, if they think I AM on unemployment, then that obviously implies job loss...so why the heck, they might say, was I still making CC charges? (Does that make sense?)

I never have said that I had a "job loss"...just that I have "no income" at this time.
Also...and I imagine this is a very gray area...I applied for two new credit cards not quite two years ago. Again, I was not working; I was subsidizing myself off the sale of my home.
On the "income" part of the credit app, I put down around what I had in the bank at the time.
One of those cards was closed by the creditor last fall; it had zero balance at the time and had never been late.
The other card will be on the BK matrix, with about an $1800 balance.
So again...are those potentially "fraudulent" situations?

There is also a third card that was opened ... but I never actually filled out an app for it. The bank just gave it to me when I deposited all those funds in savings. It also is going on the matrix.

[BKDefender]

Borrowing money that you intended to repay when you found a job is different than borrowing money with knowledge that you would be unable to pay it back ever.
Fraud is fraud is fraud. If a reasonable jury of your peers would believe that when you borrowed the money you actually intended to pay it back and believed you would be able to pay it back, then it is not fraud. It's unjust enrichment of course, but if you had the credit card already, obtained it using correct information at the time you got the card, then I think they would have a hard time proving you committed ACTUAL fraud at the time you took the $3k loan.

Remember, you have no duty to answer any questions by any creditors until they sue you and compel you to do so in a 2004 debtor's examination. In your case, I think you need to tell them where they can go - nicely of course - and that you cannot pay the bill right now. Tell them you appreciate them calling you to tell you that you owe them money - something you already knew - and if your situation changes they will be the first one to know. Then HANG UP and go about your business.

You have to remember - credit card companies have much bigger barks than they do bites. The collectors will do and say whatever they need to do and say to get your money. Don't give them any ammunition to use against you.

--William