Monday, July 16, 2007

Credit Card Statements and Preparing for Bankruptcy

Question: Why do you request 3 months worth of credit card statements prior to filing my bankruptcy case?

Answer: We have two primary reasons for requesting this many credit card statements. Both have legal and practical implications.

First, your credit card statement is the best evidence of the proper address to notify creditors when you file bankruptcy. The bankruptcy court does not independently verify the addresses that debtors provide when it mails out notices related to the bankruptcy. Using the addresses provided on the credit card statements also saves our staff the time in might take to research the creditor's address online. It enables us to file your case sooner.

Second, we like to review a client's credit card purchases to identify any potential problems with receiving a discharge. I strongly recommend that my clients stop using their credit cards once they have decided to file bankruptcy. Incurring debt that you knew would not be repaid could be considered fraudulent, thus resulting a denial of a discharge.

Creditors can file an action called an adversary proceeding to object you receiving a discharge. Purchases for luxury goods or services totaling more than $500 on a single credit made within 90 days before the bankruptcy filing date are presumed to be fraudulent if the creditor files an adversary proceeding. Cash advances totaling $750 or more during the 70 day period prior to the bankruptcy filing date have the same presumption of fraud.

We do our best to make sure that all of your creditors are notified of your bankruptcy case and to insure that you receive a discharge of all of your debts.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

No comments: