Confused about credit cards

[ksgirl38]

I'm confused about the whole credit card issue. I was advised to stop paying on them at one of the consultations that I went to. I'm still using them, mainly for groceries, some miscellaneous purchases at Target and gas. When am I supposed to stop using the cards? 3 months before I file? A week? Do I stop making payments when I stop using them? I'm not making any extravagant purchases, but will any purchases be considered fraud? I was reading something last night on a legal website that mainly mentioned luxury purchases over $500 so I'm a little confused about what is considered fraud and what isn't.

Also, I have another problem. My family celebrates Christmas at my brother's house which requires me to buy an airline ticket. This is going to require me to use a credit card. I've been waiting for the rates to drop, but haven't seen it yet. Would I be better just buying the ticket now and then stop using the cards or is buying an airline ticket a month before I file going to look bad? Obviously I'd like to get a better price, but know that I may not have the card 2 months from now to do so. Any suggestions?

[tobee43]

once you have hired the atty you MUST stop using them...and prior to filing it should be at the VERY least 3 months from you last purchase. you just can't use them anymore. once you stop using them, you also stop paying on them, so that should loosen up money for your groceries and gas. as far as the air plane ticket, well, you'd have a hard time explaining that unless it was a family emergency. so if you're going to buy it, it best be way before you file. the more distance in time between your use of the cards and your filing the better and safer for your position.

when we filed it had been over 2 years that we used a card. that way there was absolutely NO questions from the trustee.

[jst4f]

I agree with tobee43. We also needed to buy airline tickets to be used during the filling period. We purchased them ~6months prior to filing. I know we want to get a good deal on the tickets but we felt that BK was the bigger deal. While trustees understand you need to live, big ticket items like air line tickets can cause you trouble. We did clear the purchase with our attorney before we did it, just to be sure.

[SMinGA2]

If you know you're going to file, then stop paying the cards: because you're throwing money away. Instead use your $ to live, and cover basic living expenses. The sooner you stop using the cards (even for basic things) the better because you need to learn to live without them. If you don't do that before you file, then bankruptcy won't help you. You'll still be in money trouble after filing unless you get your finances straightened out now. If you're using them only for living expenses, fraud is not a concern. But if you still have a money problem (spending more than you make) without making the credit card payments, then bankruptcy will not solve that.

As for the holiday plans, bankruptcy is not meant to end your life. Making reasonable plans & purchases is ok. Meaning if/when you have the money (not credit) to pay for these things. Also keep in mind that there are times in life that you need to do things differently from your friends & family. If you can't afford to go to your brother's house for Christmas, be honest & upfront about it early on.

About the ariline tickets: I'm assuming you'll be filing in the next few months, and your case will be over before Christmas. Also assuming you have no intentions of charging them now, and then filing bankruptcy to avoid paying for the tickets. That would be fraud.

[tobee43]

actually, here in florida they will not even consider a fraud case unless the card was used 90 prior to filing. interesting, because i have heard that some trustees in other states do not abide by the 90 rule when reviewing certain debtors. however, here it's pretty much cut and dry. if you didn't use them in the last 90 prior to filing there is no fraud.....OF COURSE there are exceptions to the rule. someone who takes a huge cash advance or thousands upon thousands were charged close to the 90 day mark.

again, i think it depends where you are. i think buying in advance tickets and you have the tickets they could be considered assets for all that matter. it's just going to be the way it's presented, but i get your drift SM it could be misconstrued and look like fraud in many courts.

[SMinGA2]

If someone charges to a card, with no intention/ability to pay it back & knowing they are going to file bankruptcy - it is fraud. It could still be done (depending on the circumstances, timing) where one can 'get away' with it. And in the event of small everyday purchases, its highly unlikely to create a problem in the bankruptcy case. My intended point was that making the charges with no intent to repay is fraudulent by definition.

For non-everyday items, a creditor can petition to have a debt deemed non-dischargable. Airline tickets could easily fit into that category, especially if charged close to filing. What about saving up the $, giving cash to a relative and having them buy your tickets? You have ~7 months.

[Pandora]

Someone correct me if I'm mistaken, but I know I've read on here that fraud could be considered once you CONSULT with any attorney and continue using your credit cards - not just once you hire counsel ??
Continuing to use cards after you consulted with an attorney and then STOPPED making payments on, yet continue to use - is questionable I believe.

[ksgirl38]

I agree with tobee43. We also needed to buy airline tickets to be used during the filling period. We purchased them ~6months prior to filing. I know we want to get a good deal on the tickets but we felt that BK was the bigger deal. While trustees understand you need to live, big ticket items like air line tickets can cause you trouble. We did clear the purchase with our attorney before we did it, just to be sure.

Well, in my case it's only one ticket so if I can get a good price we're talking $300 max. Guess I'll just go ahead and buy so I can stop using them.

[ksgirl38]

If someone charges to a card, with no intention/ability to pay it back & knowing they are going to file bankruptcy - it is fraud. It could still be done (depending on the circumstances, timing) where one can 'get away' with it. And in the event of small everyday purchases, its highly unlikely to create a problem in the bankruptcy case. My intended point was that making the charges with no intent to repay is fraudulent by definition.

For non-everyday items, a creditor can petition to have a debt deemed non-dischargable. Airline tickets could easily fit into that category, especially if charged close to filing. What about saving up the $, giving cash to a relative and having them buy your tickets? You have ~7 months.

To get a good rate I really need to buy within the next 2 months. Anyone looking at my credit card statements would see that I have bought one airline ticket around the same time of year for the past several years so it's not like I'm doing anything out of the ordinary. I was planning on making a payment on the credit card after that anyway to cover the ticket. I think it needs to be pointed out that I'm talking airline ticket as in singular, one person, not for an entire family. There's a huge difference. I'm just not seeing any other options on how to handle this. I know I'm going to have to stop using the card for at least 90 days before I file which I'm not concerned about, just wondering if anyone has had experience with this issue. I didn't say I was willingly trying to commit fraud. Geesh!

[Drazil65]

Hi, I think where the problem may come in is that you have already decided to file. You have already had a consult. You are already planning to stop payments. If you charge for something like an airline ticket for a Christmas visit with family, 7 months prior to Christmas knowing that that you have no intention of paying for that ticket...you see where that is going? Why even take the chance? The trustee is not going to care that you charged the same ticket a year ago or the year before that, he is going to look back on what you did prior to filing and when you did it. Although it does not seem to be a big deal to you because its only a $300 ticket you just never know with the trustee. He might think it is a big deal and then you will have to answer for it and your case could get dismissed and then you are back at square one. The point is your intention at the time you made the purchase knowing what you know, that's all. Most of us do everything possible NOT to call attention to something during the process and avoid any possible hicup along the way, the trustees can be nasty so why help them.

Maybe in your present financial condition you may want to rethink how you are going to spend the holidays if you cannot fly, maybe an alternative way to get there, something cheaper? We have all had to make "adjustments" and give up alot of things (like homes we have been in for years), it is what it is at this point and you learn to work with it. I am sure you will work it out and good luck!

[MaureenB]

Can you use a debit card instead of a credit card?

[ksgirl38]

Hi, I think where the problem may come in is that you have already decided to file. You have already had a consult. You are already planning to stop payments. If you charge for something like an airline ticket for a Christmas visit with family, 7 months prior to Christmas knowing that that you have no intention of paying for that ticket...you see where that is going? Why even take the chance? The trustee is not going to care that you charged the same ticket a year ago or the year before that, he is going to look back on what you did prior to filing and when you did it. Although it does not seem to be a big deal to you because its only a $300 ticket you just never know with the trustee. He might think it is a big deal and then you will have to answer for it and your case could get dismissed and then you are back at square one. The point is your intention at the time you made the purchase knowing what you know, that's all. Most of us do everything possible NOT to call attention to something during the process and avoid any possible hicup along the way, the trustees can be nasty so why help them.

Maybe in your present financial condition you may want to rethink how you are going to spend the holidays if you cannot fly, maybe an alternative way to get there, something cheaper? We have all had to make "adjustments" and give up alot of things (like homes we have been in for years), it is what it is at this point and you learn to work with it. I am sure you will work it out and good luck!

Just came from my consultation and I have to say that you guys are totally blowing this out of proportion. I asked him about this and he actually said it's not that big of a deal. Plus he gave me another option that I hadn't even considered. I'm not worried about it at all.

I actually haven't decided to file. I've scheduled 3 consultations only so I could learn more and decide what to do.

If you'd read my previous posts I had mentioned that I was trying to figure out a way to pay for just that ticket on my credit card, not charge it and leave it. Geesh!

[ksgirl38]

Can you use a debit card instead of a credit card?

That's what I'm thinking. I never use mine so I completely forgot I had it. The only thing I'm concerned about is that I seem to remember seeing someone in this forum mention they had difficulty with a debit card and getting overcharged or something like that, but we'll see how it goes.

[ValleYum]

My son was injured in an ATV accident 3 days after our discharge. We had no credit cards, of course, and my debit card was in the process of being replaced. Thankfully, the airline accepted Paypal.

The beauty of having local counsel is they know what will trip the trigger in your area and with your trustee. I had charged 2 utility bills in October (we did make October's payment) prior to filing in December and all was fine - I was worried to death and our attorney was like, "Meh...". He was right. LOL He said worst case scenario would be paying the 2 charges back to the card company if they complained. I even had a $2 autobill hit a card in late November, I just called the vendor and they credited back to my card and charged it to Paypal.

[ksgirl38]

My son was injured in an ATV accident 3 days after our discharge. We had no credit cards, of course, and my debit card was in the process of being replaced. Thankfully, the airline accepted Paypal.

The beauty of having local counsel is they know what will trip the trigger in your area and with your trustee. I had charged 2 utility bills in October (we did make October's payment) prior to filing in December and all was fine - I was worried to death and our attorney was like, "Meh...". He was right. LOL He said worst case scenario would be paying the 2 charges back to the card company if they complained. I even had a $2 autobill hit a card in late November, I just called the vendor and they credited back to my card and charged it to Paypal.

Well, I didn't think it was as big of a deal as everyone was making it out to be. I had no idea the airlines would take Paypal. That's good to know. Thanks.