Using credit cards prior to bankruptcy

November 10th, 2009 by Questions

I owe a considerable amount of debt to credit cards and would like to go bankrupt but for the last 3 months, I have been using my credit cards to pay utilities, purchasing gas for my car and buying groceries etc because of getting laid off. I am concerned that the credit card companies may challenge the bankruptcy for these purchases up to the date of bankruptcy. Could you explain how this works to me?

Posted from: British Columbia


One Response to “Using credit cards prior to bankruptcy”

, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

You are correct that the use of credit immediatly prior to the filing of a bankruptcy can cause difficulties.

In general there are two general rules to follow:

1. Once you know you are going to have to file a bankruptcy or a consumer proposal stop using these cards.

2. As long as you have only used thiese for living expenses there is little likihood of difficulties. Of coures this is within reason, if you use these cards to live on and then divert your cash to travel or other extras, then the liklihood of this causing you difficulties increases substantially.

So from the sounds of it I wouldn’t be to concerned, but you are best to stop using them immediatly and it is probably a good idea to meet with a local trustee.

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