Generally, speaking you cannot use your credit card to pay for bankruptcy. The reason behind this is if you use your credit cards too close to filing bankruptcy, there is a presumption of abuse that arises. This presumption of abuse means it is assumed that you incurred debt you knew would be forgiven or discharged by Chapter 7 bankruptcy. By using your credit card to pay for bankruptcy, then filing bankruptcy, it is hard to argue you did not plan to have the cost of bankruptcy discharged. Keep in mind, you cannot keep your credit cards when you file bankruptcy.
Incurring Debt Prior To Bankruptcy
Your lawyer can’t advise you to incur debt prior to filing bankruptcy. If your lawyer accepted a credit card payment for your bankruptcy, this would be the equivalent of advising you or assisting you in incurring debt prior to filing bankruptcy. This violates federal bankruptcy law and your lawyer would experience repercussions as a result. There are a few exceptions, like accepting a credit card payment from a relative for your bankruptcy; however, attorneys have to be very careful when accepting credit card payments in any situation.
Allowable Debt Prior To Filing Bankruptcy
This does not mean you can’t incur any debt prior to bankruptcy. An example would be the purchase of a car before filing for bankruptcy. If you take out a loan to buy a car just before the bankruptcy, this is allowable. First, a vehicle loan is a secured debt. This means that the lender is secured in the event you file bankruptcy—if you want the debt discharged you would have to give them the vehicle. However, in most cases, when you buy a car before filing bankruptcy, it’s to avoid trying to buy one after bankruptcy hits your credit score and credit report. In that case, after you file the bankruptcy, you simply file a reaffirmation agreement with your attorney’s help. This way, you file bankruptcy, keep the car, and keep the debt associated with the car. The loan terms do not change.
Cash Advances And Bankruptcy Filing Fees
You can potentially take out a cash advance on a credit card to pay your attorney. However, in our opinion, this still qualifies as using your credit card to pay for bankruptcy. Additionally, if you take out more than $925 in the 70 days prior to filing bankruptcy, for any reason, the credit card company can file a lawsuit demanding that those particular funds should not be discharged in bankruptcy.
How Can I Pay My Bankruptcy Fees
Stop Paying Credit Cards — Once you know you’re going to file bankruptcy; you can stop making payments on credit cards that will be discharged in bankruptcy. This may free up some immediate cash flow to pay for your bankruptcy.
Borrow Money From A Friend Or Family Member – It’s ok to borrow money from a friend or family member to file bankruptcy.
Ask About A Payment Plan With Your Attorney – Our firm allows payment plans for filing bankruptcy. Your final payment does need to be made prior to filing the bankruptcy. This allows you to make a small payment upfront to hire us and have us work on your case. Together we will spend as much time as needed preparing for the filing. When you’re ready with your final payment, we will also be ready to file the bankruptcy. This works great for most clients.
Talk To A Charlotte Bankruptcy Attorney Today
If you’re having trouble with finances and considering bankruptcy, give us a call. You can reach us at 704.749.7747. Or you can click for a FREE BANKRUPTCY CONSULTATION and we’ll call you shortly. A brief phone conversation can change your life and get things going in the right direction. We know you have options. We hope you choose to Recover With Us.