Legal Question in Bankruptcy in Georgia

Re: Taxes Charged to Credit Card Pre-Bankruptcy

That is an interesting question that does not arise frequently, but shows why paying off a nondischargeable debt with a dischargeable credit card usually does not work. Under your card agreement, the issuer is likely entitled to a higher default rate, AND the minimum payment is going up to 4% under a new federal law. It is highly unlikely that the BR Court will take away the contractual rights of the card issuer for a nondischargeable debt, and less likely the court will not follow the federal law regarding minimum payments. Moreover, it is likely that the card issuer would have the contractual or legal right to cancel your account and demand full payment (if not already done), or in this case get a judgment of nondischargeability for the full amount. I suspect you may well be facing a bill for the entire amount, with interest. The best person to look into this issue is your bankruptcy attorney. Good luck

Re: Taxes Charged to Credit Card Pre-Bankruptcy

Paying off a nondischargeable debt with a dischargeable credit card, especially under pre-Oct. 17 law, often worked, but to make it work, there needed to be significant time elapsed. You didn't state the size of the charge, or the exact timing, so I can't say for sure that it's non-dischargeable, but it likely is. (Even that issue needs to be discussed with your lawyer as the exact amounts and dates affect the answer).

I disagree with all of the other answer posted to you except one part. The person you NEED to talk to is your bankruptcy lawyer.

Often, in these cases, your lawyer can work out a settlement where some interest, or even some principal, is waived, or where the repayment schedule is better than the original terms. It is very unlikely that you'd end up with a settlement at the default interest rate for a credit card; a good lawyer likely can negotiate a rate down even from normal rates. Try to get this done BEFORE they file a complaint on dischargeability, as if youw ait until after, they will be harder on the settlement end, and will likely want attorneys fees.

Additional Response

As an update, and in response to the poster who claimed he disagreed with my post (but did not specify where I was incorrect), keep in mind I provided you with the likely outcome based on the applicable law, and not speculation on what may be agreed upon by the parties. Prior to any such settlement, it helps to know your actual legal position.