QUESTION
Do I need to wait a specific amount of time before filing for bankruptcy after opening new creditor accounts?
Asked on Jan 11th, 2016 on Bankruptcy - Oregon
More details to this question:
I took out a couple of personal loans about 6 months ago to aid me in consolidating some debt but unfortunately, it did not work out as planned and I am back in the same place I was in 6 months ago. Do I need to wait a specific amount of time before filing for bankruptcy after opening new creditor accounts? I would hate to have my request revoked if the courts feel I purposely requested money I had no intention of paying back.
7 ANSWERS
You should pay an experienced BK lawyer to review everything with you in detail. One hours time should be sufficient.
Answered on Feb 01st, 2016 at 5:42 PM
The answer to this questions is buried in the language of 11 USC 523 (a)(2)(C). Briefly summarized, there is a presumption that a purchase within 90 days before filing bankruptcy is not eligible to be discharged, if the purchase was for luxury goods or services and was for more than $500. Otherwise, the creditor must prove that you making this debt was with a deliberate intention to not pay, and this kind of proof is difficult.
Answered on Feb 01st, 2016 at 5:42 PM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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It depends on two things. First, where you completely honest on your application for the loans? And second, did you spend the money on luxury goods (travel, jewelry, gifts or other unnecessary items). If you were honest and spent the money on necessary items, there is no waiting period. If not, you need to talk to an attorney.
Answered on Feb 01st, 2016 at 8:46 AM
You should be fine. There is no set time but 6 months leads one to believe you were intending to pay the loans as opposed to fraud (no intent to pay back).
Answered on Feb 01st, 2016 at 3:54 AM
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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Good thinking. And it is so that a debt incurred with the intention of discharging it in bankruptcy is fraudulent. However if the debt is incurred a long enough time before you file your bankruptcy petition, then it will appear less fraudulent or not fraudulent at all. Retain a skilled bankruptcy lawyer. It's almost always a good investment.
Answered on Feb 01st, 2016 at 3:54 AM
There are provisions in the bankruptcy code addressing recent debts which may be "presumed" to be "abuse" but 6 months is longer than any of those presumption periods, so you should be able to discharge those debts without any problem.
Answered on Feb 01st, 2016 at 3:50 AM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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There is no specific time, and the court can go back 6 years in Michigan to reverse fraudulent transactions. Get counsel, and do it with knowledge and correctly the first time.
Answered on Feb 01st, 2016 at 3:50 AM