Use of credit cards before declaring bankruptcy
Could you explain exactly what would happen if a person used his cards a week or 2 prior to declaring bankruptcy? I figure it would be considered fraud. When and how does a person repay monies that the creditor would consider fraud, would it extend his bankruptcy? Or would he then be held responsible for them after the discharge? Thanks for your help.
The answer to your question depends on how “annoyed” your creditors are with your conduct before you file for bankruptcy. In most cases that we have handled, the creditors inform us of the unusual purchases and as long as the items are returned or the purchases paid for the creditors don’t take it any further.
That is not to say they can’t – in cases were it is obvious the person “ran up” their debts on purpose just before they filed (by say, buying a big screen TV for example) the creditors have the right to oppose the person’s discharge which means the person will have to appear in Court and explain their conduct. These sessions never go particularly well for the bankrupt person so we strongly advise against it…
If you think you need to file bankruptcy then you shoulod not be using any forms of credit – if you continue to use credit cards or lines of credit you do so at your peril.