Vance P. Truman, Attorney at Law
Putting People's Financial Worries Behind Them Free Initial Consultation
330-591-4729

You can't rack up debt right before bankruptcy

One of the biggest misconceptions about modern bankruptcy laws is that you can rack up as much debt as possible right before you file. After all, you're going to eliminate all of your debt anyway. Why not add to it before you do?

Under current laws in Ohio, this is illegal. There's a 90 day period before the filing in which you can't have any major purchases or spending that is out of the norm.

For example, perhaps you have a credit card with a $12,000 limit. You already have $8,000 on the card, and that's part of the reason you need to file for bankruptcy in the first place. Before you do, you decide to just blow through the other $4,000. You're not going to pay any of it back, so does it matter if it's $8,000 or $12,000?

It does, because what you're trying to do is fairly transparent to the lenders. They'll object, and the court may then rule that, while the $8,000 can be discharged with your other debt, you still have to pay back the $4,000 on your own.

This doesn't mean you're not going to spend anything in the 90 days before you file. You may still use the card to buy gas, groceries and other things that are in line with your general spending. You just can't head to the mall and rack up $4,000 of debt in one afternoon, clearly trying to exploit the process.

Do you have any questions about bankruptcy? Getting the answers can help avoid common mistakes, and our website can be quite helpful.

No Comments

Leave a comment
Comment Information

Get the debt relief you need, the personal attention you deserve.

Call us today for a free consultation at 330-591-4729, or fill out the form below, and we will contact you.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Contact Information Vance P. Truman, Attorney at Law

689 Lafayette Rd.
Medina, OH 44256

Phone: 330-591-4729
Fax: 330-722-3410
Map & Directions

Payment Plans Available Call Us For Your Best Suitable Payment Option

VISA master card American express Discover network