A lot of my clients use their credit cards as means for survival (food and gas), so when they come see me they ask me the following question:  If I have recently used my credit card can I still file for bankruptcy, and will it be a problem?   There are some specific bankruptcy code guidelines that deal with this exact issue.

Under Bankruptcy Code Section 523 states that:

consumer debts owed to a single creditor and aggregating more than $500 for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable; and cash advances aggregating more than $750 that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be nondischargeable;

The Code also defines the term “luxury goods or services” as any good or service that is not reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor.

So what does this mean?  It means that any money you spent on a credit card within the last 90 days can be deemed non-dischargeable (ie it will survive bankruptcy).  How can you remedy this problem?  You can inform your bankruptcy attorney about your recent credit card use, stop using your credit card and wait until the 90 day period is up.  Defintely inform your lawyer about your credit card usage.

If you are thinking of filing for bankruptcy and would like to speak with a bankruptcy lawyer then please contact Shmucher Law, PL at 954.309.5559 or 305.741.5553.  We offer free consultations in our offices in Boca Raton, Fort Lauderdale, Miami, Plantation and Sunrise Florida.