Maxing Out Your Credit Before You File Bankruptcy - Westgate Law

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Maxing Out Your Credit Before You File Bankruptcy

There are certain times during which individuals or families might see a major influx of credit card spending: wedding preparations, moving from one home to another, vacations, the holidays, the start of a new school year, etc. It’s understandable and there are a million different reasons why: you don’t have the cash, but you have the credit, you feel safer spending on a credit card for the extra protection it offers, you pay off your credit card balances at the end of the month, you haven’t balanced your checkbook lately and need to make some large purchases, etc. I’m not necessarily in support of any of these reasons, situations, or justifications for credit card usage. I’m just stating that they exist and the majority of Americans are aware of their frequent occurrence across social lines, family ties, cultural traditions, etc. What I am going to point out and state a firm opinion on is one time during which you cannot use your credit cards for any reason.

Before you file bankruptcy – stop using all credit. Do not use your credit cards or credit accounts even if you are going to continue making payments. Some still believe that if you spend with abandon right before declaring bankruptcy, you won’t have to pay it back. They charge up their credit cards and then file for bankruptcy, listing those debts for discharge. This will not work out. Bankruptcy courts have ruled that this type of credit card activity pre-bankruptcy is bankruptcy fraud and as such, it will not be discharged.

Don’t charge a bunch of stuff before you file for bankruptcy. You won’t get away with it. It’s a misconception. And this misconception could hurt your chances of a successful bankruptcy filing that you were actually in need of prior to the decision to have a credit card shopping spree on the court.

For more information on what constitutes bankruptcy fraud and how to appropriately prepare to file Chapter 7 or Chapter 13 bankruptcy in the future, get in touch with the bankruptcy attorneys at Westgate Law.

About the Author

Justin Harelik

Justin has a singular goal: to get people out of financial distress and move them to financial stability and prosperity. He does this by combining 15 years of in-depth experience in bankruptcy, credit management, debt negotiation and student loan modifications, and he does it with both English and Spanish-speaking clients.

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