Credit Card with Employer

[Achilles07]

I have to declare Chapter 7 due to a business bankruptcy.

My question is. I have about $3k in credit card debt with credit cards from my current employer. For example I have 2 credit cards from chase, and I also work for chase.

What would be the best course of action here? Pay them off to avoid any conflicts? List them in the bankruptcy?
Will I be questioned if I pay them off?

[justbroke]

Usually payments to creditors, in the 90-days preceding the filing of the petition, giving a preference to a particular (unsecured) creditor, could be considered a preferential transfer. That preference could be clawed back by the Trustee. The Trustee would not go after you personally, they would go after the creditor that you paid. We call this the "clawback." The creditor could raise a defense as to why it's not a preference.

You will certainly be questioned about transfers made within 90-days or even 1 year of filing (an "insider" transfer). In fact, there are questions on the Statement of Financial Affairs, or SoFA, which directly address these "preferences." I'm guessing that you work for Chase and these are not "corporate" credit cards; they are personal credit cards. The only way to deal with this may be to pay the cards, and then wait at least 90 days. The downside is that they are highly likely to be closed once Chase "automatically" learns about the bankruptcy (because they subscribe to bankruptcy notices).

May I ask the reason for filing? Is it because you guaranteed business debt with a personal guarantee?

[Achilles07]

Yes

my first post here explained my situation. And that is the case. I backed up a business with a personal guarantee with a $850K loan, outstanding balance of $750k

[Achilles07]

Usually payments to creditors, in the 90-days preceding the filing of the petition, giving a preference to a particular (unsecured) creditor, could be considered a preferential transfer. That preference could be clawed back by the Trustee. The Trustee would not go after you personally, they would go after the creditor that you paid. We call this the "clawback." The creditor could raise a defense as to why it's not a preference.

You will certainly be questioned about transfers made within 90-days or even 1 year of filing (an "insider" transfer). In fact, there are questions on the Statement of Financial Affairs, or SoFA, which directly address these "preferences." I'm guessing that you work for Chase and these are not "corporate" credit cards; they are personal credit cards. The only way to deal with this may be to pay the cards, and then wait at least 90 days. The downside is that they are highly likely to be closed once Chase "automatically" learns about the bankruptcy (because they subscribe to bankruptcy notices).

May I ask the reason for filing? Is it because you guaranteed business debt with a personal guarantee?

Thanks for the response