Legal Question in Bankruptcy in Indiana

Bankruptcy-have used card within 90 days
Boyfriend is authorized user on one credit card with $13700 limit that is nearly maxed out. He uses for work travel, has always given $ to me to pay toward bill. I was laid off a month ago and he has taken pay cut. I have only recently (last 2 weeks) begun considering bankruptcy and have since learned that any charges within 90 days can be considered fraudulent and/or not be discharged. About 2k has gone on card in last 90 days mostly for gas and hotels. I have never been late on any payments, have decent credit score, and have not used any of my other cards in months, some not for years, but have total 23k in credit card debt and was struggling with minimum payments before being laid off. Did make 33k a year before lay off but only will receive $292 a week in unemployment benefits while searching for work. I understand why charges within the 90 day period preceeding filing would need to be paid back and would not be opposed to doing so, but don't want to appear fraudulent and risk bankruptcy being dismissed. Should I wait and not use the card at all for 90 days and then file or would the charges still be a problem? Am also curious if that amount would have to be paid back in a lump sum to the creditor or installments. Thanks

Asked on 12/10/08, 2:01 am

2 Answers from Attorneys

C. David DuMond Law Offices of David DuMond

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Re: Bankruptcy-have used card within 90 days

The ninty-day presumption of fraud arises only if you incur $500 for "luxury" goods and services. In other words, don't load up on furs, jewels, and the latest gizmos. Credit card use for necessary travel expenses would not be considered "luxury" goods and services, and would not be subject to the look-back, and would not cause your case to be dismissed. As to your method-of-payback question, the bankruptcy court won't force you to pay anything. What happens is, if the creditor files a complaint, and proves the fraud, then that portion of your debt is not discharged, and the creditor must then use the prevailing legal methods to collect the debt. Here is a link to the relevant code section concerning the presumption of fraud, 11USC523(c). Good luck.

http://www.law.cornell.edu/uscode/html/uscode11/usc_sec_11_00000523----000-.html

Answered on 12/10/08, 8:46 am

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