Credit card Application

[GoingDown]

The Op asked if creditors can object to information provided on an application, and you responded: "But normally creditors do not file objections to information initially provided". The truth is that the amounts stated on applications are used as a basis for granting credit. There's other factors, but they want to know that your income will sustain the payment. If they're investigating your financial situation you can rest assured they'll be looking for documents stating your income matched what you claimed it was at the time of application. If you lost a job or had a cut in hours that may not have been in the applicants control. However, stated income was. What an applicant claims on an application will definitely be looked at. Can it come back to haunt someone? If the applicant didn't provide valid information it could definitely come back on them.

Can it come back to haunt someone? Yes. BUT it is VERY UNLIKELY. Most creditors do not file any objection because it would cost them more money to hire an attorney to file an objection than they would ever get from a financially stressed person filing bankruptcy.

And then think about this... on one of my credit cards, my initial credit limit was only $750. Over a few years they continued to raise my credit limit without me ever requesting a credit limit increase and without ever verifying any income information at all until it reached over $11,000. In theory, they might be able to object to $750 worth of credit fraud, but what about the rest of the $11,000 credit limit? I think they would have to eat it.

The Nolo BK book gives a list of suggestions of questions you can fire back at any creditor objecting, such as what did they do to determine that you qualified for credit line increases.

The more years you put in between your credit card charge off date and the date you file BK, the better, obviously.

They are far less likely to object the longer you wait. If you can wait them out.

[wingnut]

Burden of proof / interpretation...

Hey,

Even if an objection occurs, who would have the burden of proof? Would the creditors have to prove the debtor guilty of lying, or does the debtor have to prove an innocent application?

Also, depending on your situation "revenue" can come from many sources. The term "Annual Household Revenue" can mean many things. For instance, a self-employed student with loans, grants and occasional parental assistance might have a wide range of revenue to report. Regardless of who you are, the snapshot approach to "household revenue" leaves a lot open to interpretation.

For this reason, some lenders ask for your previous year's taxable income. Obviously, this didn't happen so much during the whole credit boom, but I have seen it more often lately. This way, they have an historical figure, not an estimation riddled with gray areas.

FINALLY - the amount of time spend dutifully paying on time counts as well. Not just the minimum, but also eliminating much of the total principal owed to all cards occasionally. The intent to repay might be more important than initial exaggerations. Don't forget, if the amount of money it would cost to object far outweighs their potential benefit, why would they show up. Judging by the comments of experienced people here, creditors rarely object, since the Trustee is already there to represent their interests anyway.

Good Luck,

WINGNUT