how far back does the trustee investigate?

[Scream2Death]

just curious how far back does the trustee investigate your spending habits, credit cards, and such.

i heard many said six months...so if i still use a credit card six months before I file, it's ok?

thanks!

[lrprn]

just curious how far back does the trustee investigate your spending habits, credit cards, and such.

The trustee can look back ten years if they find a reason to do so, although this typically happens only when bk fraud is suspected.

if i still use a credit card six months before I file, it's ok?

Six months before filing should be ok unless the amount is excessive (thousands) and/or what you charged for was extravagant. You definitely should plan to stop charging a minimum of three full calendar months before filing to shift the burden of proving you filed in bad faith to your trustee.

[HHM]

First off, the Trustee does not care about your credit card usage, the trustee is only interested in your assets...what the trustee would investigate is the transfer of assets...legally the trustee can look back 10 years, but realistically, it is more like one year.

Your individual creditors may or may not raise an issue with your use of their credit. The general rule is you want to try to avoid any major use of your credit card within the 6 months leading up to BK...major use is cumulative charges in excess of $2000.

[loonzilla]

To HHM

I'm thinking your advise is so majority of people can avoid creditors objecting after your 314 meeting...trustee doesn't care, but the process will be smooth without creditors objecting. Question: What if charges exceeded $2K and they were for medical issues (prescriptions, doctor charges, etc)? Would you still receive the same treatment and objections as opposed to spending 2K at the casino?

[CATCHMEIFYOUCAN]

At the End of March, Beginning of APRIL 06 I obtained a new credit card with a line of $10,000 and transferred that line to another credit card. By end of APRIL I wiped out the credit line at the casino and on other stuff (mostly at the casino).

I filed in July 06. Call me LUCKY, but nothing was ever raised about the transfer (which is considered a cash advance by the creditor) or the actual cash advances on the paid off credit card (no objection by the Trustee or the any creditors. In my opinion its a HIT or MISS when its filing time! If you are filing Ch13, well you are paying them back something if not 100% depending on the plan, why would there be objections, you know. HOWEVER, even after I converted to Ch7, guess my luck rode through - as of January 07, I'm discharged.

KEEPING IN MIND I continued to pay on the minimums or something to the creditors until the month I filed. Than I completely stopped. I did this so the creditors could see I was TRYING to pay them back so there wouldn't be any risk of "fraud."

Just my two cents, CMIYC

[twuoo]

If I stop using cc 6 months prior to filing, do I still have to make the minimum payments. Or could I just stop using them, but also stop making the minimums? This is probably a big red flag.

It would be awefully hard to pay the mins AND my normal living expenses as I am using the cc for some of those things (gas, insurance etc).

[keepmine]

I'd stop using the cards and, stop making payments. Use the money you would send to the cc's to pay your everyday living expenses.

[jal1129]

loonzilla-I think it really depends on the card. As we have seen here in the forums certain cards are more likely to object then others.

This is just my personal opinion but if you are hoping to slip under the radar one thing I would'nt do is tell the cc you are going to file bk. If you do that they may flag your account to object or however they do it. I never told any of my cc I was going to file. In fact just this week I recieved a letter from a collection agency saying they had just recieved my debt and they were attempting to collect. The letter went on to say if I have filed bk to call thier office and give them the info! There is no way I am calling them! Its not my responsibility to notify my cc of bk, its thier job to keep up with it. So anyway my point is that sometimes in big corp things just slips thru the cracks.

[HHM]

I'm thinking your advise is so majority of people can avoid creditors objecting after your 314 meeting...trustee doesn't care, but the process will be smooth without creditors objecting. Question: What if charges exceeded $2K and they were for medical issues (prescriptions, doctor charges, etc)? Would you still receive the same treatment and objections as opposed to spending 2K at the casino?

Correct, it is about creditor objections.

If the charges are for necessities, then you won't have a problem.

[GoingDown]

First off, the Trustee does not care about your credit card usage, the trustee is only interested in your assets...what the trustee would investigate is the transfer of assets...legally the trustee can look back 10 years, but realistically, it is more like one year.

Your individual creditors may or may not raise an issue with your use of their credit. The general rule is you want to try to avoid any major use of your credit card within the 6 months leading up to BK...major use is cumulative charges in excess of $2000.

Oh, I didn't know they could look that far back. I've read on various creditor-related lawyer sites that the new bk laws allow them to demand to see 4 years of income tax returns. But what do they normally ask to see? Just last year's tax return?

[jal1129]

We had to provide the last 2 years returns.

[HHM]

The 10 Year look back is for "asset transfers" (i.e. real estate, etc.)

[SinkingFast]

Oh, I didn't know they could look that far back. I've read on various creditor-related lawyer sites that the new bk laws allow them to demand to see 4 years of income tax returns. But what do they normally ask to see? Just last year's tax return?

We filed New Law. Our Trustee had the last 2 year's income taxes. But our attny had the last 4 year's income taxes on file for us.

All the attnys we Consulted with,........... That's the way they were going too. Wanted the last 4 years of income taxes on file.

That seems to vary by area too. Other people have posted here their attnys only required the last 2 years be on file.

Maybe the Court holds Semimars for attnys that file in that area and tell attnys what they need or should have on file?? Or maybe it's written in the Local Rules??

[Rudolph]

loonzilla-I think it really depends on the card. As we have seen here in the forums certain cards are more likely to object then others.

This is just my personal opinion but if you are hoping to slip under the radar one thing I would'nt do is tell the cc you are going to file bk. If you do that they may flag your account to object or however they do it. I never told any of my cc I was going to file. In fact just this week I recieved a letter from a collection agency saying they had just recieved my debt and they were attempting to collect. The letter went on to say if I have filed bk to call thier office and give them the info! There is no way I am calling them! Its not my responsibility to notify my cc of bk, its thier job to keep up with it. So anyway my point is that sometimes in big corp things just slips thru the cracks.

hmmm. I was just thinking now about this. But my lawyer told me that if I get any calls from creditors to refer them to him, so now they all now. But I think it was at least 3 months of non use before I told any CC's that I was filing BK.
I bet I have objections, I just know I will.

[robivi3]

Doubtful, MBNA, AMEX, Home Depot, Citibank and a host of others never showed.