Recent usage before bankruptcy

No matter what chapter you plan on filing for, do not, I repeat do not run up debt, charge on your credit cards, take loans, especially payday loans right before you file. Do not do it to pay the lawyer. Do not do it to pay the bankruptcy court filing fees. It will only cause problems with your case.

The pertinent code section is quoted here.
11 USC § 523. Exceptions to discharge
(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt–
(2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by–
(A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition;
(B) use of a statement in writing–
(i) that is materially false;
(ii) respecting the debtor’s or an insider’s financial condition;
(iii) on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied; and
(iv) that the debtor caused to be made or published with intent to deceive; or
(C)
(i) for purposes of subparagraph (A)–
(I) consumer debts owed to a single creditor and aggregating more than $500 [$550] for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable; and
(II) cash advances aggregating more than $750 [$825] that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be nondischargeable; and
[Dollar amounts in subsections 523(a)(2)(C)(i) and (ii) are adjusted on April 1 every 3 years by section 104. Adjusted amounts effective 4-1-07 are in brackets.]
(ii) for purposes of this subparagraph–
(I) the terms “consumer”, “credit”, and “open end credit plan” have the same meanings as in section 103 of the Truth in Lending Act; and
(II) the term “luxury goods or services” does not include goods or services reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor.

This will only cause the creditors to object to the dischargeability of the debt through an adversary proceeding in your case.

About Author

Terrance Leeders

Chicago Bankruptcy Attorney, husband, father, Cubs fan.