Can I Include My Homeowner's Association Fees in Bankruptcy?

In Minnesota, your homeowner's association fees are a lien against your property.  If you don't pay the fees, your homeowner's association can foreclose its lien against your property and you could lose your home.  If you are behind in your homeowner's association fees, you can use a Chapter 13 debt consolidation plan to force your homeowner's association to allow you to bring your payments current over an extended period of time. What if you want to surrender the property to the homeowner's association or your mortgage company?  As long as you are the owner of the home and the property has not been sold at foreclosure sale, you are personally liable for your homeowner's association dues. 

If you file bankruptcy, you can only include the homeowner's association fees that are due as of the date of the filing of your bankruptcy petition.  Therefore, if you don't pay homeowner's association fees that come due after your bankruptcy case is filed, the homeowner's association has the option of suing you for the fees that come due after the bankruptcy petition is filed with the court.  Even if you are no longer living in the property, you could be responsible for paying homeowner's association fees that come due after you file your bankruptcy case.   One way around this problem in a Chapter 13 case, is to file a debt consolidation plan that provides that the homeowner's association must accept a deed to the property or start foreclosure proceedings.  This approach was accepted by the court in the case of in re: Sharon D.M. Stewart, BKY: 14-40709-MER.

For more information regarding your specific situation, contact Minnesota Bankruptcy Attorney Gregory J. Wald at 952-921-5802 or at www.BankruptcyMinn.com for a consultation.   

Can You Go To Jail For Debt?

Until the mid-19th century, many people were imprisoned for delinquent debts.  Similar to today's workhouses, you could lose your freedom until the debt was paid off.   Debtors prisons were abolished long ago, but there are still are ways that you can go to jail for unpaid debt.

If you are held in contempt of court, you can go to jail.  It’s not as hard for this to happen as you might think.  If a creditor sues you and obtains a court determination that you owe money (called a "judgment""), and you can't or won't pay, then the creditor may send you a demand for disclosure of your income, your bank accounts, and property.  Or the creditor may subpoena you for a deposition to give sworn testimony regarding these matters.  The creditor wants this information so that it knows how to garnish your wages, levy your bank accounts, and seize your property.  If you don't respond with the information, then you may receive an "order to show cause" at a court hearing as to why you should not be held in contempt of court for failing to cooperate.  If you don't then show up at the hearing with the information, the judge may enter a bench warrant for your arrest.  The purpose of the arrest warrant is not to punish you, it is to force you to give the creditor and the court the information regarding your income and assets.  It wouldn't be uncommon to be arrested on a Friday and spend the weekend in jail until you are brought before a judge on Monday to testify as to your income and property. 

If you need to file bankruptcy, save yourself a lot of misery and do it before matters reach this point. When you file a bankruptcy petition, you are protected by the automatic bankruptcy stay against collection efforts and you don't need to worry about being held in contempt of court.

For more information regarding your specific situation, contact Minnesota Bankruptcy Attorney Gregory J. Wald at 952-921-5802 or at www.BankruptcyMinn.com for a consultation.  

720creditscore.com.

Poor credit is very costly, because it means high interest rates for car loans, credit cards, and mortgages.  There is no reason for you to live with poor credit.  Bankruptcy and www.720creditscore.com can help.

While it is possible to have a credit score of over 800, a credit score of at least 720 is considered great credit.  A score of 720 or above is all you need to get the best interest rates on car loans, boat loans, mortgages, and credit cards.  If you would like to learn everything you need to know to get a credit score of 720 or above, visit this web site:  www.720creditscore.com

Bankruptcy Attorney Gregory J. Wald of www.bankruptcyminn.com is happy to announce that we have entered into a business relationship that allows us to provide our clients with a subscription to www.720CreditScore.com FREE of charge.  720 Credit Score gives you the tools to rebuild your credit score after bankruptcy.  This program will give you the tools to get great credit.  Although 720 Credit Score charges $1,000.00 for its program, I am able to offer the program for FREE to my clients.  Contact me today for more information!

Student Loans in Bankruptcy

In order to eliminate student loans in bankruptcy, it is necessary to sue the lender and prove that it would be an "undue hardship" to be required to repay the loan.  The courts have interpreted this requirement stringently, making it difficult for most borrowers to eliminate their student loans in bankruptcy.  

In March 2015, President Obama directed the US Department of Education and other federal agencies to develop clear standards as to when a person would be considered to have an undue hardship.  This would be beneficial, because people who met such standards could file their lawsuit and not have to worry that it would be opposed.  This would significantly decrease the cost of bringing a lawsuit to prove undue hardship and many deserving people could then eliminate their debts through bankruptcy.  Unfortunately, the US Department of Education forgot who they are working for and instead gave the green light to student loan lenders to aggressively fight student loan hardship discharges.  I urge everyone to let their Congressmen and Senators know how they feel about this.

HELP! I'VE BEEN SUED!

When credit cards, bank loans, medical bills and other debts become seriously delinquent, the creditors usually send them to a collection agency first.  If the collection agency can't collect the debt, then it may go to a collections lawyer who will sue to collect the debt.  You will know that you have been sued in Minnesota when you receive a Summons and Complaint in District Court or a Complaint in Conciliation Court.  

When you are served with a lawsuit, it is like a slap in the face!  Please don't panic.  There are things that you can do.  If you dispute the debt in a District Court case, you will probably need a lawyer to defend you.  If you dispute a Conciliation Court, you can go to the hearing yourself and explain your reason for disputing the debt to the judge.  If you don't dispute the debt and your debts are otherwise manageable, you could call the collections lawyer and try to make payment arrangements.  If you have other debts, it might make sense to file bankruptcy instead.  A bankruptcy will stop a lawsuit to collect a debt, even after the lawsuit has started.  If the creditor has already obtained a court judgment against you, bankruptcy can stop the creditor from ever trying to collect the judgment against you.

For more information regarding your specific situation, contact Minnesota Bankruptcy Attorney Gregory J. Wald at 952-921-5802 or at BankruptcyMinn.com for a consultation. 

 

What’s New About Getting a Mortgage After Bankruptcy

The waiting period for obtaining an FHA or VA mortgage is two years after you receive your Chapter 7 bankruptcy discharge.  It normally takes about three months to get your discharge after we file your bankruptcy petition with the court.  However, there is a new rule that allows you to obtain an FHA or VA mortgage as little as 12 months after you receive your discharge, if you can show that the bankruptcy was caused by extenuating circumstances beyond your control and if you have since exhibited a documented ability to manage your financial affairs in a responsible manner.  

For Chapter 13 bankruptcy, it is possible to obtain an FHA mortgage after you have made one year of timely payments under your bankruptcy payment plan.  You must also have permission to enter into the mortgage loan from the bankruptcy court.

For more information regarding your specific situation, contact Minnesota Bankruptcy Attorney Gregory J. Wald at 952-921-5802 or at BankruptcyMinn.com for a consultation. 

Keeping Track of Companies You Owe Money To

When you run into financial problems and bills begin to mount, it can sometimes be hard to keep track of what companies you owe money to. You might receive calls from multiple collection companies and they often do not identify who they are collecting for. In order to eliminate your debts in bankruptcy it is important to list all of your creditors.

What can you do? You can start by pulling credit reports.  There are three nationwide credit reporting bureaus and you can pull free credit reports from all three credit bureaus at www.annualcreditreport.com.  Credit reports will typically show credit card debts, bank loans, and other types of debts with financial institutions. The credit report may show collection agencies that have purchased delinquent debts or are collecting them on behalf of another company. Credit reports typically do not show medical debts unless they are with a collection agency.

If you come to see me, I can pull a three bureau merged report for you.  If you are not sure what medical debts you have, you may want to call the hospital or other medical provider and ask them for the amounts owed.  If you have medical insurance you could contact your insurance company. It may be able to give you a list of what amounts were covered by insurance and what amounts you still are responsible for.  When you have this information, you have the ammunition you need to eliminate your debts and get a fresh start.

WHAT WILL MY FRIENDS AND RELATIVES THINK OF ME?

You might be worried about what friends and relatives will think of you if you file for bankruptcy protection.  You can relax.  Your friends and relatives want what is best for you.  For example, one of my clients was borrowing heavily from his parents in order to keep up with his credit card debt.  His brother suggested to him that it would be better to file bankruptcy and eliminate his credit card debt, instead of borrowing money from his parents that he might never be able to repay.  He filed a bankruptcy case and eliminated all of his credit card debt.  He didn't lose anything that he owned.  He had a lot of fears about bankruptcy that all turned out to be false. 

Many of my clients are referred to me by concerned friends and relatives.  I have had parents bring me their sons and daughters. I have had sons and daughters bring their parents. Sometimes its hard to see a solution when debt problems mount.  The worry and stress can paralyze you.  A concerned friend or relative can sometimes take a more detached view and help you see that there can be a reasonable solution.   Many times, the solution is bankruptcy. Don't let fear stop you from solving your debt problems.

Debt Management Plans VS Filing Bankruptcy

The banks have spent millions of dollars on lobbyists and were able to get Congress to pass a law that everyone who wants to file bankruptcy must first complete a briefing (counseling session) with a consumer credit counselor.  If the idea was to steer people into debt management plans, then the new law hasn't worked out well for the bankers.  Almost no one who completes the pre-bankruptcy briefing goes on to enter into a debt management plan. However, the counseling session is not all bad news. Many people do feel that they received useful information on budgeting and saving money from the counseling session.

Avoid a “BIG” mistake!  Contact Minnesota bankruptcy attorney Gregory Wald at (952) 921-5802 or visit them on the web at bankruptcyminn.com.  Discover the difference between “debt management plans” and filing bankruptcy while you are still able to make an informed decision between the two processes.

Can a Person Filing Bankruptcy Exclude Debts They Want to Pay?

I am often asked whether a person filing bankruptcy can exclude debts that they want to pay.  When you file a bankruptcy petition, you must give the court a complete list of your debts.  You are not allowed to leave anything off.  However, it is possible to repay debts that you have listed in your bankruptcy.  You might not be required to repay the debt, but you still can pay it voluntarily if you wish.  For instance, if you have a car loan or home mortgage, you can continue to pay these debts in order to keep your home or car.  If you have a debt to a relative, you can repay them what ever is left owing to them after you complete your bankruptcy case.   Occasionally, a creditor might request that you sign a "reaffirmation agreement".  A reaffirmation agreement is an agreement that you will not discharge (eliminate) a debt in your bankruptcy case and that you will be legally bound to pay it. Your attorney can help you decide if a reaffirmation agreement is a good idea.

How Often Can I File Bankruptcy?

When a person has filed bankruptcy in the past, they may want to know how long they must wait to file bankruptcy again.   If a person has filed a Chapter 7 bankruptcy petition and received a discharge of their debts, they must wait 8 years before they can file another Chapter 7 petition.  However, the waiting period to receive a discharge in a Chapter 13 case after a previous Chapter 7 case is only 4 years.  Sometimes unfortunate circumstances create a need for a second bankruptcy in less than 4 years after the filing of a Chapter 7 case.   You can file a Chapter 13 case less than 4 years after filing a Chapter 7 case and receive court protection from your creditors, but you won’t receive a discharge of your debts.  It sometimes makes sense to file such a case to prevent foreclosure of a residence or to receive court protection from creditors.

The waiting period to file a Chapter 13 case after a previous Chapter 13 case is only two years from filing date to filing date.  Since the typical Chapter 13 case lasts for three years, there is rarely any waiting period for filing a Chapter 13 case after a previous Chapter 13 case.  The waiting period to file a Chapter 7 petition after a Chapter 13 petition is 6 years.

HOW TO PAY FOR BANKRUPTCY

One of the most common questions about bankruptcy is:  How do I pay for my lawyer?

Chapter 7 bankruptcy allows a person to eliminate most types of debts completely, while allowing a person to keep all assets that are exempt from creditors.   The court filing fee and attorney’s fee for Chapter 7 bankruptcy must be paid in advance.  If a person wants Chapter 7 bankruptcy and is not in a big hurry to file, in many cases it makes sense for them to stop making payments on their debts and use the savings to make monthly payments toward the attorney’s fee.  I can accept monthly payments and file the case when all of the fees are paid.  Sometimes a family member gives my clients a gift or a loan of the funds.  Sometimes my clients have enough in savings to cover the fee or they are able to borrow the funds from their 401k plan.

Sometimes, the funds cannot be borrowed from a family member, the person’s wages may be subject to garnishment or their money in the bank has been seized by creditors.    Should they need to file bankruptcy right away, they might consider a Chapter 13 case.  Chapter 13 allows a person to consolidate their debt and pay a fraction of the debt in monthly payments over three to five years.  The debt is not normally required to be paid in full, but only whatever is affordable in the person’s budget. For Chapter 13, I need the court filing fee paid in advance, but most or all of the attorney’s fee can be consolidated with the other debts and does not have to be paid in advance.  Chapter 13 can be a good way to get immediate protection from the bankruptcy court, even if you don’t have the funds for attorney’s fees up front.

The Problems That Occur When Filing Bankruptcy Without An Attorney

WHAT HAPPENS AFTER I FILE FOR BANKRUPTCY?

Filing for bankruptcy can be a daunting and emotionally draining experience. Going it alone will only make the task even more monumental. It doesn't have to be so bleak though. Sometimes in life we need a reboot, if you will. Many of great financiers, moguls, and millionaires alike have filed for bankruptcy. As well have average salary earners, college students, contract holders et al. The point is, at one time or another many of us have been "in over our heads".

Once you file the petition there are a number of documents you must submit to the court and your Trustee within specific time frames. Failure to comply may cause your case to be dismissed. Unfortunately, if you file without an attorney, there is no one who will tell you what has to be filed and when. Which is why whenever dealing with anything above parking ticket a lawyer is your best course of action.

The Bankruptcy Court sends out a notice of your bankruptcy filing to all of the creditors listed in your schedules. This notice advises the creditors that you have filed for protection, which chapter you filed and advises them that an "automatic stay" is in effect, preventing creditors from pursuing any further efforts to collect the debt. This would include staying a foreclosure sale, wage garnishment, and even a civil court proceeding or trial. Criminal cases are not stayed, nor are child support hearings.

For more information regarding bankruptcy, chapters, filing, or simply answering any questions you may have, contact Minnesota Bankruptcy Attorney Gregory J. Wald at 952-921-5802 or at BankruptcyMinn.com for a consultation.

Bankruptcy Can Be A Way Of Obtaining College Transcripts That Are Withheld For Nonpayment Of Tuition Or Loans

Bankruptcy can be a way of obtaining college transcripts that are withheld for nonpayment of tuition or loans. The filing of a bankruptcy petition creates an “automatic stay” that prevents any effort by a creditor to collect on a debt. The great majority of courts that have ruled on the issue have held that the withholding of a college transcript on account of an unpaid debt constitutes an attempt to coerce payment of the debt and is therefore in violation of the bankruptcy stay. The Bankruptcy Court in Minnesota ruled this way in the matter ofre Lanford, 10 B.R. 132 (Bankr.D.Minn.1981) At least two U.S. Circuit Courts of Appeals have also ruled this way, In re Merchant, 958 F.2d 738 (6th Cir. 1992); In re Gustafson, 111 B.R. 282 (Bankr. 9th Cir. 1990), rev’d on other grounds 934 F.2d 216 (9th Cir. 1990). As a result, it is very likely that your former school will release your transcripts voluntarily after your file a bankruptcy petition. If the school refuses to release the transcripts and the court finds that the school has violated the bankruptcy stay, the school can be sued for actual and punitive damages, including attorney’s fee and costs.

Tuition debt in most cases is not discharged (eliminated) in bankruptcy, so ultimately you may still have to pay the tuition debt. However, if you have other debts problems that bankruptcy can resolve, the release of your college transcripts may be one more reason to consider filing for bankruptcy protection.

For more information regarding your specific situation, contact Minnesota Bankruptcy Attorney Gregory J. Wald at 952-921-5802 or at BankruptcyMinn.com for a consultation.

Tips For Maximizing Your Budget During The Holiday Season

Thanksgiving kicks off the start of the holiday season, which also happens to be the season in which we spend the most. You may feel like it's difficult to avoid going into debt during this time, but here are some tips that will help you save money.

• Calculate a budget and stick to it. No one wants to enter the holiday season already over budget with maxed out credit cards and buyers remorse.
• Rather than sending out holiday cards, email your Thanksgiving greeting to friends and family. You will save money on postage and printing costs. 
• If you've been designated to host Thanksgiving this year, let family and friends know that you're starting a new potluck tradition. This will alleviate the cost of putting on an entire meal for everyone. This also saves time and allows you to truly perfect one dish. 
• Keep your holiday decorations simple and minimal. This will give you something to be thankful for once you open your credit card statement without the added expense. 
• Shop at wholesale stores for staple items, this can amount to hefty savings. Also, purchase generic brands when possible.
• Minimize side dishes. If you know that the cranberry sauce is barely touched each year, skip it. 
• If you're flying out of town for the holiday, choosing the right day and time to fly can save you money. Often times, flying very early on a Tuesday or Wednesday results in the lowest fares. 

Have a happy Thanksgiving! Contact Minnesota Bankruptcy Attorney Gregory J. Wald at 952-921-5802 if you would like more information about your bankruptcy options.

Do I Need To Disclose The Auto Loan That I Cosigned For In My Bankruptcy?

When filing for bankruptcy, you are required to report all of your liabilities and assets. An auto loan in which you cosigned for is considered a liability. Even if you do not possess the vehicle and the primary borrower makes all of the necessary payments, you are still liable for the loan.

During your bankruptcy, you are required to report the co-debtors on any of the debt you have. In this situation, even if the you are discharged of your obligation to repay the loan, your co-borrower will still be responsible for the debt.

It's important to know that one borrower filing for bankruptcy could constitute a default on the loan. This could result in the creditor accelerating the loan and requesting full payment against the co-borrower or repossession. However, it's more likely that the lender will allow the co-borrower to remain in possession of the vehicle if timely payments are continued to be made under the current terms.

How is the primary borrower on an auto loan affected if the cosigner files for bankruptcy?

In this situation, the primary borrower is still legally obligated to pay the balance of the loan. The bankruptcy and discharge of the consignee's obligation of the loan results in the lender being able to only pursue the primary borrower if the loan goes unpaid.

Depending on your auto loan contract, you could be considered in default once the consignee's obligations are discharged. However, it's likely that the primary borrower will keep the vehicle if timely payments are continued to be made. Most lenders do not want to repossess a vehicle if the payments are kept current.

It's important to keep an eye on one's credit report if the cosigner files for bankruptcy. If the bankruptcy is listed on the primary borrower's credit report, it is considered incorrect. This can happen and it's imperative that all three credit reporting agencies are contacted to correct this issue.

Gregory J. Wald, Attorney at Law
1500 Northland Plaza
3800 American Boulevard West
Bloomington, MN 55431
Telephone: 952-921-5802
Toll Free: 1-866-747-1130
Fax: 952-831-1346
BankruptcyMinn.com
Gwald314@msn.com

Speak With A Bankruptcy Attorney About A Hardship Discharge

Filing for Chapter 13 gives people with a source of income the choice of devising a plan to repay some of their debt when they're experiencing a financial hardship. This is why Chapter 13 is also known as the "wage earner's plan."

In the instance that you've already filed for Chapter 13 bankruptcy, yet you are still experiencing a financial hardship, there are options. If you find yourself in this predicament do not simply stop making payments to your trustee. Once you do that you can expect your bankruptcy case to be dismissed without discharge.

Don't ignore your problem. Speak with your bankruptcy attorney about a Hardship Discharge. This type of discharge will clear debts and give you a fresh start, even though your repayment plan has not been completed.

This option is available to you if:

• The failure to complete your repayment plan was due to circumstances beyond your control. 
• Your creditors received at least what they would have gotten out of a Chapter 7 liquidation case. 
• Modification of your plan isn't possible. For example, you sustained an injury or illness that prevents adequate employment that would finance a modified plan. 

Hardship Discharges do not apply to any debts that are non-dischargeable, so it's much more limiting than a Chapter 13 bankruptcy. There are many facets to a Hardship Discharge which is why it is important to speak to your bankruptcy attorney.

Do not feel trapped by your finances. You do have options for dealing with your debt. Contact Minnesota bankruptcy attorney Gregory Wald at 952-921-5802. He will go over your Chapter 13 case and give you all the best options specific to your situation.

Set Yourself Up For Success After Bankruptcy

Now that you've successfully discharged or restructured your debts in bankruptcy, it's time to think about your financial future. Here are some important steps to take to ensure your success:

• Compile a list of any debts that were discharged in bankruptcy. Certain debts such as student loans, child support, spousal support, and some types of taxes are not eliminated in bankruptcy cases. Be sure to pay any debts that were not discharged in a timely fashion to keep your finances in good standing.
• Keep all of your bankruptcy papers in a safe place. In the event that a creditor mistakenly attempts to collect a discharged debt, you will have proof that it was included in your bankruptcy. If you happen to lose your discharge order, another copy can be obtained from the clerk of bankruptcy court.
• Keep an eye on your credit reports after your bankruptcy. Make sure that your credit report reflects your discharged debts as having a zero balance. According to a recent government study, one in five consumers have an error in a credit report issued by a major agency.
• Since most types of liens survive bankruptcy discharges, verify the balance on any liens you may have. Know how much you owe and continue making payments on time if you wish to keep the secured property. If you fail to do so, your creditors may enforce the lien.
• Set aside money for an emergency fund. It is important to have enough money saved in case situations arise such as a job loss, car repairs, medical expenses, or other emergencies. Experts recommend having enough money saved to cover at least three months of expenses.
• Create a realistic budget. Refrain from buying things that you can't afford, or need -- Especially when it comes to using credit. Try to use cash for your purchases when possible. Don't succumb to the high interest credit card offers that you'll be getting in the mail after your bankruptcy, because there will be plenty of offers.

Setting yourself up for success after bankruptcy is important so that you don't fall into old bad habits. For more information on bankruptcy and life after, contact Minnesota Bankruptcy Attorney Gregory Wald today at 1-866-747-1130.

Common Bankruptcy Myths

Everyone will know that I filed for bankruptcy...
While filing for bankruptcy is a matter of public record, people generally won't find this information unless they are looking for it.

All of my debts will be wiped out in Chapter 7 bankruptcy...
Sadly, not every debt is able to be discharged. Non-dischargeable debts include, but are not limited to: child support, some types of taxes, student loans (unless there is "undue hardship"), and debts incurred fraudulently.

I will lose everything that I have...
There are exemptions put into place to protect parts of your life. Exemptions are laws that specify amounts and types of property that you can keep from creditors. Some of the most common exemptions are for your car, clothing, your house, household goods, and money in qualified retirement plans. The majority of people who file bankruptcy don't lose anything.

I'll never have good credit again... 
You can begin to rebuild your credit simply by paying the bills on time. You can also apply for a secured credit card. The best way to build good credit is to use only 10 percent of your available credit. Keeping your debt to income ration low is best.

I will have to file bankruptcy with my spouse...
It's not always necessary for spouses to file bankruptcy together, but it could be in your best interest. If you and your spouse share many of the debts, it's better to file together. However, if only one spouse is responsible for most of the debt, it may be better for just that spouse to file. Your bankruptcy attorney will help you determine this.

I don't want to include all of my creditors in my bankruptcy...
When filing for bankruptcy, all creditors must be listed. However, you can pay any creditor you wish after you file bankruptcy, even though you may not be legally required to do so. For instance, you can continue to make payments on a car loan or a mortgage in order to keep the car or the house.

I can only file bankruptcy once...
While there are limitations, you may file more than once. Chapter 7 bankruptcy can be filed once every 8 years. Chapter 13 bankruptcy can be filed every 2 years. If you filed Chapter 7 bankruptcy the first time and would like to file for chapter 13 next, 4 years must pass between filings. If you filed Chapter 13 first and want to file Chapter 7 next, 6 years must pass between filings.

I can max out all of my credit cards before I file for bankruptcy...
This would be considered fraudulent and may jeopardize your dischargeability. It's best to stop using your credit cards if you think that you may need to file bankruptcy.

I have to have a certain amount of debt before I can file...
There is no minimum amount of debt a person must have to file for bankruptcy. If the debt is beyond your ability to repay, you can file for bankruptcy if it's the best choice for your financial situation.

You should always consult and work with an experienced attorney when filing for bankruptcy. If you have any questions surrounding these common myths regarding filing for bankruptcy, contact Minnesota bankruptcy attorney Gregory Wald at (952) 921-5802.

How Credit Card Use Can Affect Your Bankruptcy

If you plan on filing for bankruptcy, it is never a good idea to run up credit cards immediately beforehand. While it may be tempting, using your credit cards directly before filing for bankruptcy can lead to complications that include not being able to discharge that portion of your debt.

Generally, credit card debt is dischargeable through filing for bankruptcy. However, fraudulent debt is not. If you run up credit card debt with the intention of discharging it in bankruptcy, it is a fraud against your creditors and they may ask the court not to discharge the debt. You should be especially careful not to charge as much as $600.00 on a single card for luxury items within 90 days prior to filing bankruptcy. Also avoid cash advances on a single credit card of $875.00 or more within 70 day before filing bankruptcy, because in both situations, the court must presume that you incurred the debt fraudulently.

Additionally, some creditors will look at overall credit card usage in the 6 to 12 months prior to filing and object to a discharge if the charges are excessive and appear to be done in contemplation of bankruptcy. So the best practice is not to use any credit cards once you have met with an attorney and/or know you plan to file bankruptcy.

Once you have consulted with an attorney, be sure to inform your them of any purchases of $600 or more that you’ve made on your credit cards because in most instances it may be in your better interest to delay filing until after the 90 day presumption period has passed.

If you purchase necessities like food and diapers on your credit cards within 90 days prior to filing bankruptcy, your credit card company probably will not complain. However, you should stop making charges of all types once you have made the decision to file bankruptcy.

In some cases, it makes sense to incur debt with the intention of filing bankruptcy. For instance, if you car needs to be replaced, it may make sense to finance a dependable replacement vehicle before you file bankruptcy. However, you should always obtain the advice of a bankruptcy attorney before taking any financial steps in contemplation of filing bankruptcy case.

If you are unsure about any purchases you’ve made within the 90 days before you are planning on filing for bankruptcy and are wondering if your credit card debt can be discharged, consult with bankruptcy attorney Gregory J. Wald for more information.

Gregory J. Wald, Attorney at Law
1500 Northland Plaza
3800 American Boulevard West
Bloomington, MN 55431
Telephone: 952-921-5802
Toll Free: 1-866-747-1130
Fax: 952-831-1346
BankruptcyMinn.com
Gwald314@msn.com