Can I Use My Credit Cards Before I File Bankruptcy?

Can I Use My Credit Cards Before I File Bankruptcy?

Once you have met with a bankruptcy attorney it is best stop using your credit cards. The goal of filing bankruptcy is to receive a discharge (an order eliminating your debt) so you can get the fresh start you deserve.  However, some debts are excluded from discharge including debts obtained by "false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor's or insider's financial condition." A creditor (party who is owed money) may sue to ask the court to determine whether a debt can be discharged. 

The court must find the following items: (1) a representation; (2) that the debtor (party who owes money) knew was false when it was made; (3) with the intent to deceive the creditor; (4) relied upon by the creditor; (5) that causes an injury to a creditor. When a credit card is used that is a representation that the user intends to pay the debt.  If a credit card is used without the intent to ever repay the credit card debt that may be considered fraud. 

This is especially true if the credit card is used on luxury items (such as a TV, vacation, etc.) or if the credit card is used differently than the purchaser ever used the card in the past.  However, this does not mean that just because a credit card is used the debt is non-dischargeable. If the credit card is used before the debtor realizes they have to file bankruptcy then the debt may be dischargeable. 

It is best to have a seasoned attorney represent you in bankruptcy to help navigate through the complex area of bankruptcy law.  Call the Law Office of Kimberly A. Sheek today to obtain your free consultation.

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