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How do recent credit card purchases effect bankruptcy?

Within the last few months I`ve made purchases with my credit cards. I`m in financial straights and am considering bankruptcy. These purchases are, for the most part, consumables, so I don`t have them anymore but some of the purchases are items I still have. Is there a time frame where unpaid credit card purchases aren`t considered anymore?

Thank you in advance, great website.

Posted from: Ontario

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One Response to “How do recent credit card purchases effect bankruptcy?”

A licensed trustee said...

If you haven’t made unusual purchases or taken cash advances then you shouldn’t have to worry about recent charges to your credit card. Anything you’ve charged to credit in the three months before you file for bankruptcy is considered “reviewable” – that means it may be looked at to determine whether or not it was a reasonable thing to do given your circumstances.

I’ll give you an example. You always use your credit card to buy a tank of gas on Mondays. If it is something you’ve always done then the credit card company will accept it as normal.

Here’s another one – you take a $1000 cash advance the day before you file bankruptcy. This will likely get you in some trouble as it looks like you were using up the last of your credit just before you file. At the very least you’ll need to explain what yuo did with the money and I suspect you will have to pay it back before your bankruptcy will be considered complete.

Whatever trustee you are dealing with will ask you if you have made unusual purchases or taken cash advances before you file for bankruptcy – be honest with them (it will save you trouble later).