Legal Question in Bankruptcy in California

Re: bankruptcy

There's a presumption that if you use your credit cards knowing that you're about to file bankruptcy, it's fraudulent. Shred your credit cards if you're going to file bankruptcy and DON'T run them up before you shred them!

Re: bankruptcy

It never looks good to use a credit card within a few months of filing bankruptcy. Even worse is if you took out cash advances, purchased a new TV, or have simply run up a lot of debt. Recent credit activity can raise the presumption of abuse, and creditors may challenge your right to eliminate the debt.

Under the new law (October 2005), it is easier for creditors to show this presumption of abuse. Consumer debts owed to a single credit card company totaling more than $500 for luxury goods or services that were incurred within 90 days before the bankruptcy filing date are presumed to be fraudulent if the creditor files legal action to object to you receiving a discharge of these debts. The same presumption of fraud exists for cash advances totaling $750 or more during the 70 day period prior to the bankruptcy filing date.

Waiting 6 months is not guarantee either. If the creditor can prove that you borrowed the money without the intent to repay it, the creditor can take legal action to request that you be denied a discharge of that particular debt.