QUESTION
The waiting 90 day for luxury purchase before filing for bankruptcy, is that per card?
Asked on Jul 12th, 2013 on Bankruptcy - New Jersey
More details to this question:
I am confused. I read that I should wait 90 days to file if I have charges of $600 or more of luxury expenses. Is that per card or all together? I also read that the trustee can go back as far as a year anyway and say that a person had no intentions of paying. I really need to file but have probably unknowingly broken these rules. What do I do?
4 ANSWERS
The rule about luxury purchases is set forth in 11 U.S.C. Section 523(a) (2) (c). It states, "consumer debts owed to a single creditor and aggregating more than $600.00 for luxury goods or services incurred by an individual debtor within 90 days before the order for relief under this title are presumed to be nondischargeable." This means that it is per creditor, not per card and not altogether. If you have 2 American Express Cards owed to the same creditor or 3 Capital One cards owed to the same creditor, these cards will be aggregated. If you have unknowingly "broken these rules" and you have not filed bankruptcy yet, the best thing to do is wait to file bankruptcy, if you are able to. If you have a foreclosure sale tomorrow, you may not be able to wait. If you can, delay the filing until the 90 day period has run.
Answered on Jul 15th, 2013 at 10:33 PM
I don't think it matters whether the expenses are for luxury items or not. It is up to the creditor, not the bankruptcy trustee, to decide whether or not to file a case asking that the postion of the debt run up during the past 6 months not be eligible to be discharged. There is no dollar limitation and the amount you are referring to is only someone's opinion and is not something that is carved in stone. As a practical matter, each creditor, not each card, would make a decision on whether the amount involved would make filing suit worthwhile.
Answered on Jul 14th, 2013 at 8:03 PM
Bankruptcy Attorney serving Cleveland, OH
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Benson Law Firm
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This is an area that is best approached with qualified counsel from an experienced lawyer.
Answered on Jul 14th, 2013 at 8:03 PM
General Law Attorney serving Cherry Hill, NJ
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Mark S. Cherry, Attorney at Law, PC
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You must disclose it and the creditor or trustee may object. If they object you will not be discharged on those purchases.
Answered on Jul 14th, 2013 at 8:02 PM