Does the Chapter 7 Discharge Include Recent Credit Card Debt?

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  2. Does the Chapter 7 Discharge Include Recent Credit Card Debt?
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If you are a Tennessee or Georgia consumer and you are considering filing for Chapter 7 bankruptcy, your most significant reason for taking action is probably overwhelming debt, such as credit card debt. Since Chapter 7 bankruptcy discharges virtually all credit card debt, many struggling consumers may be tempted to get themselves “settled” before filing. They decide to continue using their credit cards right up until they file bankruptcy – since the debt is included in the bankruptcy anyway. Right?

Tempted to Use Your Credit Cards Right Up Until You File Bankruptcy? Please Reconsider.

If you are planning to file bankruptcy and you also plan to continue using your credit cards right up until it’s time to file your bankruptcy petition, you should reconsider. Bankruptcy Code includes a presumption against the discharge of “recent” credit card debt. Any credit card debt over $675 incurred for purchasing consumer goods within 90 days of the date you file bankruptcy will not be discharged.

Is It Possible to Get Recent Consumer Debt Discharged?

While the Bankruptcy Code presumption is specific, some debtors do find themselves facing both the need to file bankruptcy and recent credit card charges. If you need to file bankruptcy and you recently used your credit cards, work with an experienced bankruptcy attorney to present information to the Court. An experienced attorney can help you show that at the time of the charge, you had no intention of filing bankruptcy and that the items purchased were not luxury items. The Court may overrule a creditor’s objection and allow debt to be discharged. While the presumption against the discharge of new debt exists in the Bankruptcy Code, it represents a rebuttable presumption. In any given bankruptcy case, the petitioner can rebut the presumption by showing evidence to the Court (receipts, documentation, etc.) to make it inapplicable to the case.

Better Safe Than Sorry – Stop Using Credit Cards When You Decide to File Bankruptcy

While the possibility exists to rebut the presumption preventing recent credit card debt from being included in the Chapter 7 discharge of debt, you should stop using all your credit cards as soon as you find yourself considering bankruptcy. Failing to set all the credit cards aside immediately is a huge risk – not just to that particular portion of the overall debt, but to the entire bankruptcy case. If the bankruptcy court decides that your behavior was intentional, or worse, fraudulent, it could lead to your bankruptcy case being dismissed or even leave you facing charges.

If you have questions about the bankruptcy process, or if you need to discuss the protections offered by bankruptcy, we can help. Find out how to get a fresh start by filing bankruptcy. Get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

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