I’m About to File Bankruptcy in Florida, Can I Max Out All my Cards and File?

Once in a while a client will come to my office and ask me the following question, if I am going to file for bankruptcy can I just go max out all my credit cards and then file, or can I take out cash advances?  The answer to that question is No, No, No, and I would be weary of representing a client like that in Florida.  Why should a debtor do this?  Under the bankruptcy code a creditor can sue the debtor for any monies spent within the 90 days before filing bankruptcy if the items purchased are deemed to be a luxury good and have an aggregate value of $500 or more.  Ok so what does that mean to a regular person?  It means that if you used your credit card within the 90 days before filing and you purchased airplane tickets, electronics, fancy dinners, sporting equipment, jewelry, or anything that would be considered a luxury good then be prepared to be sued by that creditor.  Creditors who sue the debtor, in the instance above, will be able to win a judgment against the debtor and the judgment debt will be non0dischargeable (i.e. survive the bankruptcy).  Debtors will then continue to be liable for those debts even after their other debts have been wiped out in the bankruptcy.

As for cash advances, any cash advances, obtained by the debtor, within 70 days prior to filing for bankruptcy will be deemed non-dischargeable and thus the debtor will continue to be liable for the debt even after their other debts have been discharged.

If you are thinking of filing bankruptcy and have used your credit card in the 90 days before filing then it would be a good idea to bring those credit card statements to your attorney for him to review to determine the best approach to filing your bankruptcy.  Debtors in the greater Miami or Fort Lauderdale in been of credit counseling and who would like to schedule a free consultation, to review their bankruptcy options, should contact Ofer Shmucher at Shmucher Law, PL.

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