Legal Question in Bankruptcy in Texas

Re: bankruptcy after credit card fraud by family member

Short answer -- I believe the best strategy would be to file a Ch. 7 case.

Under Section 523(a)(2) creditors can object to relief for certain credit card transactions. The bankruptcy courts generally are lenient in these situations. Basically, if a debt is owed to a creditor for luxury goods or services or credit advances/cash advances and these kinds of transactions occurred within 60 days of the date the bankruptcy is filed, the creditor can challenge the transactions based on the law contained in Section 523(a)(2). However, this section of the Bankruptcy Code only creates a presumption of fraud. Your attorney can present evidence that the father did not commit fraud.

In addition the credit card companies would have to raise an issue of fraud and my experience tells me they may or may not do it in your situation. If all of the charges relate to one credit card then is more likely that it will be pursued. However, even in the worst case scenario, should a credit card company raise a challenge a good attorney can negotiate your way out of any significant problems. Maybe if there is a challenge you reach a compromise to repay a portion of the debt. Or, you file a motion to change the type of case from a Ch. 7 into a Ch. 13 and you propose a repayment plan under the authority of the Ch. 13 Trustee. Please call me to discuss the specifics of your case in greater detail. ph. (972) 231-5500 or (800) 303-0720