Large balance transfer 6 months before filing

[LeadSledGal]

Hello all again,

one other question.

about 6 months before filing chapter 7, I did a balance transfer/check to pay off another card, about $4000.

On the same card as the $4000, the last charge was 114 days prior to filing- the charges totalled around $2,700 which included groceries, medicine, gasoline, vet trips, eye glasses, household goods, 2 car payments, and maybe $700 on non-necessity items.

Am I in a good time frame in regards to filing since I am way past the 90 days on the balance transfer and just outside the 90 days on the actual charges/purchases.

[JackBondLove]

Did you make 3 months of payments on that transfer? It still is probably not a problem in the eyes of the trustee as you were simply robbing Peter to pay Paul. However, any large balance transfer fairly close to the filing could make the creditor feel like they have a good chance of winning an AP against you, in which case, if they win, you would not get discharged for that debt.

It's always a good idea to give yourself a year between any large balance transfers and BK filing, and to make a few payments on that account. Time is your friend!

[LeadSledGal]

yes, only made 3 payments after doing the Balance transfer, but all the charges followed the Balance transfer, and the payments fell within those transactions as well.

[catleg]

No one can guarantee anything, but you'll probably be fine. I mean like 99.9% chance you're probably fine. Unless there is some other complicating factor. Like you sent a letter to the credit card's CEO saying "neener, neener" or something.

[blessed]

And I know the standard is 90 days but during our 341 the trustee only asked about balance transfers or cash advances in the 30 days prior to filing.

[keptdigging]

The issue isn't what the Trustee thinks... it's: Will the creditor try to make the case that the debt isn't dischargeable because it was "fraudulent" -- because you knew you wouldn't be paying it back? There are lots of threads on this. (Obviously a judge can't truly read your mind 6 months ago--and every debtor who isn't a complete moron claims they intended to pay it back.)

Twelve months seems to be the gold standard for a safe harbor (though there is no legal principle that makes it magic.) However outside of 90 days the creditor has the burden of proof. And the challenge requires an "adversary proceeding" (AP) which is a lawsuit within the bankruptcy which will cost them.

The 3 months of payments is evidence on your side.

And while you see the $4K as a large transfer, the bank's legal expenses pursuing the matter can easily add up to that. Plus if it's a consumer debt they might have to cover your legal fees if they lose.

Although many of us try to delay filing as long as we can, most of the horror stories about APs around here involve debts to non-banks or larger transfers with no payments.

Hence, catleg's calculus that you'll probably be just fine. Just no guarantees.