Legal Question in Bankruptcy in Virginia

Use of Credit Card before filing bankruptcy

We are at the point of having to file bankruptcy very soon. We have $2,000 left on one credit card, and desperately need car repairs done. Can we use the remaining balance on our credit card before filing? If not, how long would we have to wait after using the card to be able to file?

Asked on 5/25/06, 8:53 pm

2 Answers from Attorneys

James Wilson James H. Wilson, Jr., Attorney & Counsellor at Law
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Re: Use of Credit Card before filing bankruptcy

You should not incur debt in anticipation of discharging that debt in a bankruptcy case. Bankruptcy is designed to help an honest debtor get a fresh start. When you borrow money from someone with the intent to discharge it in bankruptcy, you are committing fraud. Fraud may give rise to civil or criminal liability. In bankruptcy, a debt obtained by fraud may be determined to be non-dischargeable under Section 523 (a) of the Bankruptcy Code. In addition, a bankruptcy case based on significant fraud may be determined to be a filing not in good faith. You should consult with a Virginia attorney to discuss your options in and out of bankruptcy.

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5/26/06, 6:32 am
Richard S. Stolker Uptown Law, LLC
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Re: Use of Credit Card before filing bankruptcy

Because recent amendments to the federal Bankruptcy Code specifically prohibit an attorney from advising “an assisted person or prospective assisted person to incur more debt in contemplation of such person filing a [bankruptcy] case,” in most cases an attorney cannot ethically advise you to incur more debt before filing bankruptcy.

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5/26/06, 9:54 pm

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