Chapter 13-- 90 Day Question

[letterkenny]

I need to file Chapter 13, but I have a few personal loans that are 2 months old. I ready about the presumption of fraud if the debt is less than 90 days old. The plan my attorney is recommending is a 100% repayment. Should I wait for 90 days to file, or am I safe because its a 100% repayment?

[justbroke]

If you're in a 100% plan there are no issues. Since you are filing a Chapter 13, there would likely be no issues anyhow. The worse they could do is make you pay it all back in a Chapter 13. But wait, you are already in a proposed 100% plan. Ta da.

[letterkenny]

That's good to hear. I didn't want to be accused of fraud and I could just wait to avoid all that. I was hoping not to be forced to wait.

[justbroke]

The bankruptcy code just says that there is a presumption of certain debts incurred within 90-days of filing. The creditor would still need to take some action to get them declared as non-dischargeable. The debts are those purchases of "luxury" goods to a single creditor aggregating over $800; and, for cash advances over $1,100 to a single creditor.

I haven't heard of this being a big issue in Chapter 13s since most Chapter 13s pay back something to the unsecured creditors. In a 100% plan, you'd be paying it all back and possibly quicker (36-60 months) than the normal payback to those creditors.

If you were filing a Chapter 7, your attorney would probably ask you to wait and make several more regular payments on those loans before filing.