Filing Personal Bankruptcy
As a Bankruptcy lawyer who has done this for 20 years, the biggest problem I see is people wait too long for filing personal bankruptcy. Increasing debt and stress affects their relationships badly and sometimes permanently. I can fix the money problems. It is much harder to fix the relationships.There are some red flags when you might want to consider when filing bankruptcy. It is a difficult thing to decide when you are over your head and might want to consider filing bankruptcy. It is difficult and stressful to make sense of all the numbers and all the questions. Here are some thoughts on when it is at least time to consider speaking to a Bankruptcy lawyer.
There is no magic formula for deciding when filing personal bankruptcy is the right choice. It is an option you might consider if you:
- Are paying only minimum amounts on your bills
- Can’t budget yourself out of debt within five years
- Are getting notices that your mortgage or loans are being foreclosed
- Have had a severe financial setback, such as losing your job or a major client, a divorce or a costly illness
- Your creditors are suing you
- Your wages are garnished
Rule one to filing personal bankruptcy Credit cards must stop :
A person who is seriously considering bankruptcy should stop using credit cards. If you use a credit card within 90 days of filing bankruptcy, the use of the card will be scrutinized for fraud. If the court finds that your use of a credit card was fraudulent, the debt will not be discharged. The court may also decide to dismiss your petition as a whole, and you could face criminal fraud charges.If you make a large purchase with a credit card right around the time you file for bankruptcy, the court may get the impression that you never had the intention to repay the debt in the first place. Making credit card purchases without the intention to repay the debt is fraud. A credit card company may challenge your ability to have the debt owed to it discharged. This challenge is called a non- dischargeability action.
Certain actions are likely to prompt a creditor to file a non-dischargeability Action. Examples include the following:
- Having an increase in credit card usage shortly before filing
- Receiving large cash advances in the months prior to filing
- Credit card charges after consulting with a bankruptcy attorney
- Exceeding your credit limit
If you are concerned that a creditor may challenge the discharge of a debt, your bankruptcy attorney can help you decide which strategy is best to employ.
Bankruptcy does not get rid of all debts. You are still responsible for:
- Child support
- Back taxes
- Recent large purchases of more than $550 for luxury goods bought within 90 days of filing
- Fines or penalties of government agencies
- Fraudulent debts
- Cash advances of $825 within 70 days of filing