In part 3 of this series we discuss poor/excess use of credit which is the third most common reason for filing bankruptcy. Credit card bills, installment debt, car and other loan payments can eventually become unmanageable, until finally the borrower is unable to make even the minimum payment on each type of debt. If the borrower cannot access funds from other sources such as friends or family, then bankruptcy is usually the inevitable alternative.
Some may consider debt-consolidation plans but statistics indicate that most debt-consolidation plans fail for various reasons, and usually only delay filing for most participants. Although home-equity loans can be a good remedy for unsecured debt in some cases, once it is exhausted, irresponsible borrowers can face foreclosure on their homes if they are unable to make this payment as well.
Are you overwhelmed by the burden of excessive debt? If so, contact a Bankruptcy Attorney at 636-724-3355 or visit us at www.bankruptcysolo.com to schedule your no-cost consultation with an experienced bankruptcy attorney.
Credit Card Fraud in Bankruptcy
Many people file for bankruptcy to eliminate credit card debt which is typically discharged in bankruptcy. However, bankruptcy law states that any debt you obtained by fraud, misrepresentation, or false pretenses is nondischargeable in bankruptcy. This includes credit card charges or cash advances you never intended to pay back when you used your card. Credit card charges and cash advances are presumed fraudulent and nondischargeable under the following circumstances:
Charges for luxury items within 90 days of bankruptcy. Charging more than $650 on a single credit card for luxury goods or services (i.e., goods and services not reasonably necessary for your support or maintenance) within the 90-day period prior to filing your bankruptcy.
Cash advances within 70 days of bankruptcy. Obtaining cash advances of over $925 in aggregate during the 70 days preceding your bankruptcy filing.
It is important to consult with a bankruptcy attorney prior to filing bankruptcy. An attorney can help you to avoid these common mistakes and ultimately help you to get a fresh start. Call a Bankruptcy Attorney at 636-724-3355 or visit www.bankruptcysolo.com to discuss these and other complex legal matters at your free consultation.
Brandee D. Iannelli
St. Charles and St. Louis Bankruptcy Attorney
St. Charles and St. Louis Missouri Bankruptcy Attorney