Can Holiday Debt be included into my Bankruptcy?

Are You Having Troubles Making Ends Meet? Be Careful How You Use Your Credit Cards! 

People may have financial difficulties at this time, but the holiday season is upon us. Sometimes, they believe that they can make their holidays happy by applying for a new credit card just to purchase Christmas gifts. This wouldn’t be a problem ordinarily, but it becomes one if you decide that you are going to max out the cards and then file for Chapter 7 bankruptcy in the New Year. The fact is that your holiday debt may not be included in your bankruptcy. 

You may have thought that you would do what was described above. If this was your plan, a bankruptcy lawyer Brooklyn NY would advise you against it. You might desperately need to hire a bankruptcy lawyer in Brooklyn right now because your financial situation is a disaster, but if you go to the stores and buy Christmas gifts right before you file for bankruptcy, the court may accuse you of bankruptcy fraud. 

It is a fact that you can commit bankruptcy fraud before you ever file for bankruptcy. 

Can Holiday Debt Be Included in My Bankruptcy? 

It’s possible that any debt that you incur while shopping for Christmas gifts may not be included in your bankruptcy. Even worse, you could be accused of “bankruptcy fraud.” 

What Is Bankruptcy Fraud? 

Before you ever go to your Brooklyn bankruptcy attorneys and ask to file for bankruptcy, you can commit bankruptcy fraud. You might have heard that bankruptcy fraud is hiding some of your assets or not being entirely truthful when you are filling out your bankruptcy papers, but it is more than that. 

Bankruptcy fraud is also something that happens before you ever enter a bankruptcy court, like in the following examples: 

• You decide to write a check for your Christmas gifts even though you know that you don’t have enough money in your account, but you do know that you are going to file for bankruptcy next month.
• Weeks or even days before you file for bankruptcy, you decide to charge expensive items on your credit cards.
• You use your credit cards to pay for Christmas gifts worth thousands of dollars that you intend to include in your bankruptcy next year.
• You apply for a new card in November or December that you have every intention of including in your bankruptcy.

After filing for bankruptcy, you will be assigned a trustee, and the trustee may work with your creditors if they believe that you committed bankruptcy fraud. The trustee and your creditors will then build a case against you for bankruptcy fraud. 

To guard against the possibility of a charge of bankruptcy fraud, your bankruptcy attorney Brooklyn NY will advise you not to use your credit cards if you are going to file for bankruptcy in the New Year. If you must use them, only do so if you have money to pay your creditors. Otherwise, they may accuse you of bankruptcy fraud. 

Hire a Brooklyn Personal Bankruptcy Attorney 

As you can see, it isn’t a good idea to charge purchases on your credit cards right before you file for bankruptcy. Your Brooklyn bankruptcy attorney would definitely tell you this from the beginning, so don’t do it. If you are having trouble making all of your payments and would like to pursue bankruptcy, contact us at the Ursulova Law Offices so that we can consult with you and help you determine the best plan of action for you. This definitely does not include maxing out your credit cards, so before you do that, contact us first.