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Beware of accumulating more debt prior to bankruptcy

On Behalf of | Jun 13, 2017 | Bankruptcy, Firm News

You’ve made the decision to file for Chapter 7 bankruptcy. Perhaps you and your attorney have set the wheels in motion. A question that many people have is what they can continue to spend money on when they have a pending bankruptcy case without jeopardizing it. It may be tempting to make a few last luxury purchases, but don’t do it.

Any large non-essential purchases with anything other than cash or a debit card within the months or even as long as a year prior to a bankruptcy filing may be seen as fraud. Simply don’t increase your debt unless it’s necessary.

Once bankruptcy is filed and creditors have been notified, they can challenge your right to write-off your debt to them if it appears you have intentionally been spending outside of your means. This may include cash advances on credit cards. Creditors have every incentive to fight bankruptcy debt write-offs, so don’t give them ammunition they can use to do so.

Remember that the goal of Chapter 7 bankruptcy is to get a fresh financial start. If you don’t refrain from accumulating debt in the months leading up to it that could be seen as excessive or unnecessary, you jeopardize your ability to write-off all of your unsecured debt.

If you are considering bankruptcy – even if you are only in the early stages of doing so – you should contact a Quinn Law Firm bankruptcy attorney.  They can help you understand what can be a very complicated process, and advise you on how best to improve your chances of getting out from under your financial problems.

Source: Bankrate, “Don’t spend money before bankruptcy,” Justin Harelik, accessed June 09, 2017


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