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Considering Bankruptcy? Don’t Run Up Your Credit Card Bill

June 29, 2022

Bankruptcy is an effective tool for relief from credit card debt. Unfortunately, some filers make mistakes that prevent them from discharging their credit card debt in bankruptcy. A St. Louis bankruptcy lawyer can help you avoid these mistakes to maximize the debt relief that is available to you through bankruptcy. The following tips can help you avoid problems discharging your credit card debt in bankruptcy.

Stop Making New Charges Right Away

When you file for bankruptcy, you ask the court to excuse you from paying credit card debt legally. There are certain circumstances in which credit card debt is presumed to be “non-dischargeable,” meaning that the debt is not forgiven and the debtor must pay it even after their bankruptcy. One of the most common problems with credit card debt is when new charges are made too close in time to the bankruptcy filing. If, for example, a person charged thousands of dollars on a credit card and then filed for bankruptcy the very next day, there is a presumption this was intentional.  The creditor could then take action to make this non-dischargeable. The sooner you stop making new charges on your credit cards, the better your timeline will be for filing for bankruptcy and proving that your credit card debt should be discharged. 

Do Not Take Any Cash Advances

New purchases are not the only credit card activity that can cause problems in the bankruptcy court. If you take cash advances immediately prior to filing for bankruptcy, the same principal applies.  It is important that large cash advances are not taken out immediately before filing. 

Be Especially Cautious With “Luxury Goods”

Another problem with credit card debt is luxury purchases. Luxury purchases over a set amount are problematic if they are made within ninety days of filing for bankruptcy. “Luxury goods” can be any purchase that is not necessary for you to work or live, which is a broad category. Anything other than food, transportation, utility payments, school supplies, or work tools can be considered a “luxury.” If there is any question about the nature of the charges on your credit cards it is important to speak to a lawyer to discuss whether there is a problem. 

A St. Louis Bankruptcy Lawyer Can Help You Avoid Problems Discharging Credit Card Debt in Bankruptcy

Attorney Andrew Kirkwood Smith has over ten years of experience handling bankruptcy cases. 

He handles every case personally to deliver excellent case results for clients throughout Missouri. Call (314) 866-3955 to speak with a St. Louis bankruptcy lawyer right away. Our phones are answered 24/7, and all clients have our attorney’s direct cell phone number.