Accumulating substantial debt on bank cards instantly previous to initiating chapter proceedings underneath Chapter 7 is a follow that pulls important scrutiny from the chapter court docket and collectors. Such actions will be interpreted as a fraudulent try and discharge money owed incurred with no intention of compensation. For example, charging 1000’s of {dollars} value of luxurious items or money advances shortly earlier than submitting for chapter exemplifies this probably problematic habits.
The timing and nature of bank card utilization are important elements examined throughout chapter proceedings. Courts intention to forestall abuse of the chapter system and guarantee honest therapy for collectors. Historic precedents display {that a} sample of extreme bank card spending within the interval main as much as submitting for chapter can lead to challenges to the discharge of these particular money owed, and even all the chapter case. The perceived intent behind the costs performs a central position within the court docket’s willpower.
