Good Info from Nolo.com
I was reading nolo.com about chp 7 bk, there is alot of good info there. Here is a little about what you should consider before filling bk.
You Recently Incurred Debts for Luxuries
Creditors are getting fairly aggressive about crying "fraud." Credit card issuers reportedly lose several billion dollars a year from people who file for bankruptcy. In an effort to minimize the number of debts that are discharged, some credit card issuers routinely challenge bankruptcy cases filed by people who charged large luxury items, or got cash advances shortly before filing.
If you've recently run up large debts for a vacation, hobby, or entertainment, filing for bankruptcy may not help you, at least in respect to those particular debts. Most luxury debts incurred in the two months prior to filing can't escape discharge in your bankruptcy unless you convince the court that you had a feasible plan to pay them back and weren't contemplating bankruptcy at the time. In fact, if your prebankruptcy conduct is shameless enough, the trustee may suspect fraud in your entire bankruptcy case and ask the court to dismiss it entirely.
Last-minute debts presumed to be nondischargeable include:
debts of $1,150 or more to any one creditor for luxury goods or services made within 60 days before filing, and
debts for cash advances in excess of $1,150 obtained within 60 days of filing for bankruptcy.
But keep in mind that a judge can still question (and ultimately refuse to discharge) debts for less than $1,150, or debts you incurred more than 60 days ago, if the judge concludes that you incurred them without intending to pay them back. To discharge luxury debts, you will have to prove that extraordinary circumstances required you to make the charges and that you really weren't trying to put one over on your creditors. It's an uphill job. Judges often assume that people who incur last-minute charges for luxuries were on a final buying binge before going under and had no intention of paying. In this regard, some courts have held that each use of a credit card carries with it an implied representation that you will pay that charge -- evidence showing that you knew you wouldn't be able to pay it is sufficient proof of fraud to make the debt nondischargeable. (In re Mercer, 246 F.3d 391 (5th Cir. 2001).)
You Are Attempting to Defraud the Bankruptcy Court
Just as a bankruptcy court won't tolerate a debtor who has played fast and loose with his creditors, the court will toss (and possibly attempt to jail) anyone who deliberately misleads the court itself. If you lie, cheat, or attempt to hide assets, it may ultimately harm you more than your current debt crisis.
You must sign your bankruptcy papers under "penalty of perjury," swearing that everything in them is true. If you get caught deliberately failing to disclose property, omitting material information you are asked to provide about your financial affairs during previous years, or using a false Social Security number (to hide your identity as a prior filer), your case will be dismissed and you may be prosecuted for perjury or fraud on the court. On the other hand, you are allowed to make innocent mistakes. If you accidentally leave something off your papers or incorrectly state something on your forms, you can correct your papers or explain the mistake to the trustee. Fraud is very different. It is an intentional act designed to pull the wool over the court's eyes.
While prosecution for fraud is still rare, it's on the rise. A debtor in Massachusetts went to jail for failing to list on his bankruptcy papers his interest in a condominium and $26,000 worth of jewelry. Another Massachusetts debtor is serving time for listing her home on her bankruptcy papers as worth $70,000, although it had been appraised for $116,000. An Alaska debtor was jailed for failing to disclose buried cash and diamonds. A Pennsylvania debtor omitted from her papers $50,000 from a divorce settlement and was sentenced to some time in prison. And a debtor in Ohio was imprisoned for using a false Social Security number.
You Recently Incurred Debts for Luxuries
Creditors are getting fairly aggressive about crying "fraud." Credit card issuers reportedly lose several billion dollars a year from people who file for bankruptcy. In an effort to minimize the number of debts that are discharged, some credit card issuers routinely challenge bankruptcy cases filed by people who charged large luxury items, or got cash advances shortly before filing.
If you've recently run up large debts for a vacation, hobby, or entertainment, filing for bankruptcy may not help you, at least in respect to those particular debts. Most luxury debts incurred in the two months prior to filing can't escape discharge in your bankruptcy unless you convince the court that you had a feasible plan to pay them back and weren't contemplating bankruptcy at the time. In fact, if your prebankruptcy conduct is shameless enough, the trustee may suspect fraud in your entire bankruptcy case and ask the court to dismiss it entirely.
Last-minute debts presumed to be nondischargeable include:
debts of $1,150 or more to any one creditor for luxury goods or services made within 60 days before filing, and
debts for cash advances in excess of $1,150 obtained within 60 days of filing for bankruptcy.
But keep in mind that a judge can still question (and ultimately refuse to discharge) debts for less than $1,150, or debts you incurred more than 60 days ago, if the judge concludes that you incurred them without intending to pay them back. To discharge luxury debts, you will have to prove that extraordinary circumstances required you to make the charges and that you really weren't trying to put one over on your creditors. It's an uphill job. Judges often assume that people who incur last-minute charges for luxuries were on a final buying binge before going under and had no intention of paying. In this regard, some courts have held that each use of a credit card carries with it an implied representation that you will pay that charge -- evidence showing that you knew you wouldn't be able to pay it is sufficient proof of fraud to make the debt nondischargeable. (In re Mercer, 246 F.3d 391 (5th Cir. 2001).)
You Are Attempting to Defraud the Bankruptcy Court
Just as a bankruptcy court won't tolerate a debtor who has played fast and loose with his creditors, the court will toss (and possibly attempt to jail) anyone who deliberately misleads the court itself. If you lie, cheat, or attempt to hide assets, it may ultimately harm you more than your current debt crisis.
You must sign your bankruptcy papers under "penalty of perjury," swearing that everything in them is true. If you get caught deliberately failing to disclose property, omitting material information you are asked to provide about your financial affairs during previous years, or using a false Social Security number (to hide your identity as a prior filer), your case will be dismissed and you may be prosecuted for perjury or fraud on the court. On the other hand, you are allowed to make innocent mistakes. If you accidentally leave something off your papers or incorrectly state something on your forms, you can correct your papers or explain the mistake to the trustee. Fraud is very different. It is an intentional act designed to pull the wool over the court's eyes.
While prosecution for fraud is still rare, it's on the rise. A debtor in Massachusetts went to jail for failing to list on his bankruptcy papers his interest in a condominium and $26,000 worth of jewelry. Another Massachusetts debtor is serving time for listing her home on her bankruptcy papers as worth $70,000, although it had been appraised for $116,000. An Alaska debtor was jailed for failing to disclose buried cash and diamonds. A Pennsylvania debtor omitted from her papers $50,000 from a divorce settlement and was sentenced to some time in prison. And a debtor in Ohio was imprisoned for using a false Social Security number.