What do they consider luxury purchases?

[cj0203]

We most likely have to wait until May to file, but we want to buy a few things that we are not sure are considered luxury or not. Like we would like to get some new furniture but would that be bad since we aren't paying our bills anymore?

I really need to schedule an appt with the atty we plan to retain so I can ask her all these questions!


Edited to add:: This would all be with CASH, I see people think I meant using CCs, but I was not clear as I did mean using cash for these items.

Thanks!

[keepmine]

You can buy what you please with your money. Where problems arise is with using credit for things not a necessity withing 90 days of filing. Things like furniture and expensive vacations, etc.

[danaf]

using your credit cards at this point (knowing you are going to file) would be considered fraud. be careful.

[Flamingo]

Be prepared to explain any purchases on credit cards that will be part of your filing for at least three months prior to your filing date. I would really advise you to be prepared to show six months prior because under the old law, that is what he had to provider and also one year of bank statements. Items of survival such as food would probably not create an issue if things are that bad that you have to use credit to purchase food but some Trustees will scrutinize everything searching for fraud. I would suggest if you can live without it, don't get it.

[cj0203]

Ok, I wasn't clear; my fault. This would all be with CASH, not credit. We haven't used our CCs in almost 3m and before that they were only used for food/gas stuff like that (you know, pay the bill and use the card for necessities...)

So ANYTHING we buy now is all on cash from our bank acct, nothing on credit at all.

[no_it_all]

So ANYTHING we buy now is all on cash from our bank acct, nothing on credit at all.

Interesting, I would <guess> that since you are dealing with your own money there would be no issues. Unless of course the Trustee checked out your bank statements and wanted to know why you spent $$$ at Big Bob's Bargain Basement eight weeks before you went BK. To be safe, I would check to see if there is some sort of <form> you have to sign at your BK stating that in the last 90 days, you haven't spent more than $600 with any one creditor or business...Leave no paper trail.

[ssdsco]

According to my attorney it's OK to buy whatever you want as long as -

- it's cash, not credit
- you get something of fair value for your cash. No giving away cash or overpaying for something from a relative or that kind of stuff
- if you purchase an asset like furniture you list in your BK filing. Hopefully it's exempt

Doing this just ahead of filing may raise the trustee's eyebrows but according to my attorney there's nothing the trustee can do other than scrutinizing the rest of your filing.

[cj0203]

Thanks for the posts. We weren't planning on spending a ton, just a bit on furniture for the new baby and our son's room.

[CindyLou]

If you go out and blow cash on luxury type items that could be a problem and seem like you are blowing through your cash to keep the trustee from taking it and applying to your debts. I would think that furniture for your children shouldn't be an issue. Keep receipts to show where the money went and you should be fine.

[cj0203]

Thanks guys! I feel better now We just wanted to get some stuff we've needed badly but couldn't afford until we got our taxes back.

[ejny65]

I would really advise you to be prepared to show six months prior because under the old law, that is what he had to provider and also one year of bank statements.

Do they need 6 months or one year of bank statements? Do we have anyone in the forum that has asked to go back more than six months of bank statement and more than two years of tax return ?????