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Credit Card Purchase before bankruptcy

I`m struggling with bringing in enough income to pay my monthly obligations and have been relying on my line of credit. I have a full-time job and a small home based business. Clearly I need to bring in more revenue to avoid bankruptcy in the months to come. I am considering purchasing a new laptop for my small business purpose that will allow more efficient operations and potentially more revenue. Would this type of purchase be contested if I have to declare bankruptcy in the months to come ie. 4 months?

Posted from: Nova Scotia

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One Response to “Credit Card Purchase before bankruptcy”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

It is possible that a transaction like this could be an issue during bankruptcy. What would likely happen is if you bought the laptop on credit prior to bankruptcy, as part of your bankruptcy you would have to still pay for the laptop, but you would make payments to your trustee so that the money could be distributed equally among all of your creditors. Essentially the principle is that you can’t keep an asset you have not paid for, but you cannot pay that specific creditor for the asset as then they will be given special treatment to the detriment of your other creditors. So by paying the money to the trustee you avoid any issues.