The 90 days prior to your bankruptcy are 3 very important months for you as a debtor. A lot of people ask if they can continue to use their credit cards prior to filing for bankruptcy. The answer is that they should avoid using their credit cards within 90 days of the bankruptcy filing at all costs!
The official Bankruptcy Code provides that if a person incurs debt on a credit card that totals more than $550.00 within 90 days of the bankruptcy filing, those debts are presumably non-dischargeable, and will most likely have to be paid back. This rule of the Bankruptcy Code only applies however to the purchase of "luxury goods or services." A good Bankruptcy Attorney in Mesa Arizona can advise you on all of the complexities of bankruptcy law. If you attempt to file for bankruptcy without the help of an experienced lawyer you may file incorrectly and find yourself overwhelmed.
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What are Luxury Goods:
The Bankruptcy Code states specifically that luxury goods or services does not include goods or services reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor." What that means is if your credit card was used within the 90 days of your filing, and if your purchase was not reasonably necessary for the support of you or your family, it may need to be paid back. This does mean however that the opposite is also true; if you purchase something that is necessary for the support of your family that exceeds $500.00 like gas or groceries, you will most likely not have to pay it back.
Can the Creditor Challenge Purchases Made Within 90 Days:
The credit card provides the total amount of your purchases and also shows where the purchases were made. Due to this it is possible for a creditor to look closely at the store you made your purchases at and make an objection because of the name of the store. For example if a creditor looks at your purchase history within the last 90 days and sees a bunch of charges at Best Buy chances are they are going to object and you will most likely be held responsible for paying back that amount. Therefore it is a good rule of thumb to just avoid using within 90 days of filing for bankruptcy, unless it's an emergency or necessary to support you or your family.
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