People who have run up too much credit card debt and cannot even make their minimum payments should quit using the cards. That seems like common sense, but the individuals often are in such dire financial straits they are paying their utility bills with credit cards and cash advances. An important factor to consider is that, if the person decides to file Chapter 7 with the help of a Bankruptcy Lawyer in Tacoma WA, running up credit cards prior to doing so may be viewed as fraud.
Challenging the Discharge of Debt
Any debt accumulated within 90 days of filing with a Bankruptcy Lawyer in Tacoma WA might not be dismissed. Credit card companies and lenders may justifiably claim that the customer ran the debt with no intention of paying it back. The creditors may challenge the discharge of debt in court.
It’s especially inadvisable to start spending more than usual on general credit cards or store cards during this time or buying expensive items. Sure, it’s entirely possible that the refrigerator broke down for good a month before the person declared bankruptcy, but the store that financed the purchase should not have to make a gift of the appliance.
Evidence of Hiding Assets
A related aspect involves trying to hide assets. Most people filing for bankruptcy have little left in the way of liquid assets, but some may take out most of the money they still have from savings, investment accounts, or checking accounts. If there is no evidence they used the money to pay utility bills, credit card balances, mortgage, rent or car payments, the court will want to know where all that cash went.
More Serious Legal Trouble
When a person files Chapter 7 bankruptcy and is represented by a lawyer such as Kevin G. Byrd, all collections activity from most sources must stop. Some exceptions include student loans and child support. However, if transactions over the past few months are determined to constitute fraud, those debts are not covered by bankruptcy protection. The person now may be in more serious legal trouble. Review all the potential issues with an attorney.
