In this article, we’ll discuss the important topic of: “Using Credit Cards Before Filing Chapter 7”
Today, many individuals file bankruptcy when they find themselves under a load of debt. There can be different debt loads, such as a loan or credit card bills. Yes, pending or accumulating credit card bills can also become a burden, especially when your income source has been interrupted somehow. You can indeed file bankruptcy to get some time to pay the credit card bills or discharge the debt without getting harassed by the service providers.
But if you make a habit of using credit cards and then filing bankruptcy, the credit card service providers can easily understand this trick. They might soon charge a lawsuit of fraud against you. So, it is essential to know the grounds for using credit cards before filing Chapter 7 bankruptcy.
Using Credit Cards Before Filing Chapter 7
It may have happened that you used your credit card for various expenditures while you had a stable job or income. But suddenly, you have lost that job or source of income, and you are in no position to pay back the credit card debts. For such cases, you can file bankruptcy and seek help from the bankruptcy court. But that does not make you eligible for using credit cards before filing chapter 7 intentionally. If you think that you can use credit cards to the fullest and then can file bankruptcy, the credit card service providers can soon understand this trick of yours. Soon, they will charge fraud against you.
But if you are seriously stuck up with credit card debt and wish to get rid of it, there are two ways.
- When you file Chapter 13, you can make some payment towards the credit card debt. The pending amount will be wiped out.
- When you file Chapter 7, the entire amount can get wiped out.
But again, you should understand this that if the credit card service providers prove that you have done fraudulence, then the court may not help you in this. In such a situation, you may have to make the full payment towards the debt.
So, here are some of the decisive things that you should keep in mind while using credit cards before filing chapter 7.
Maximizing Your Limit Before Filing Bankruptcy:
If you have already accumulated a credit card debt, you can file for bankruptcy to have a peaceful life. But if you intend to spend before filing chapter 7, this can count as a fraudulent activity. For example, if you have already decided to file Chapter 7 and you have taken the necessary steps, but still, if you spend from the credit card before finally filing Chapter 7, this is fraudulency. You should refrain from such activities if you wish to discharge your debts.
How Can Creditors Claim Fraudulence?
Apart from the credit card service providers, the other creditors can also claim a fraudulence case against you. This mainly happens in the case of buying luxury items of a higher amount from a single creditor. In the case of returnable items, you should return the items to settle down the issue. But it is not rather that can be returned; you may have to talk to your attorney who can convince the court that you are in no position to pay back the amount.
Credit Card Companies Challenging Dischargeability:
After you have filed bankruptcy, the credit card company checks through your history of expenditure. If you have made a massive transaction from one place or have been immediately spending before filing chapter 7, the credit card company can file a lawsuit against you for fraudulency. In such a situation, the discharging of the debt is stopped, and you have to make the payment. An easier way is to ask for extra time to pay off the debts or to settle with the credit card company to close the matter.
Can You Use a Credit Card After Filing Chapter 7?
Credit cards are an easy option today to afford items that you cannot afford with your liquid money instantly. You can slowly pay off the bills of the credit card later on. But can you use a credit card after filing Chapter 7? This is a significant question that many people ask. To this, there are two essential answers.
- When you have seen once that the overspending habit has led you to such a situation, you should avoid having a credit card after bankruptcy.
- But if you still wish to have it, you should initially apply for the secured credit card options. Once you have paid off the bills regularly for six months or more, you can apply for a regular credit card.
So, the answer to can you use a credit card after filing Chapter 7 is entirely upon you. If you think you cannot take up that burden again, you should ignore it. But if you are sure that you will use the credit cards more wisely this time, you can get one.
Credit cards can be a great help at times. But if you do not pay off the bills on time, it keeps on accumulating, and you end up under a mound of debt. Indeed, you can file bankruptcy for credit card debts, and the debt is also dischargeable. But it will depend upon several factors. The factors such as the expenditures that you have made or if you were using credit cards before filing Chapter 7 will count in this.