Preferential Payment

[twuoo]

Sorry to keep beating this question....BUT .....

When you stop making payments and you don't have the 90+ days between the last time you used cc, doesn't that draw suspicion of fraud? As if you went out and made charges and then didn't try to pay the mins for next month?

I am a no-asset case. All my debt is divorce related. I can't imagine the creditors challenging the charges, but you never know.

Also, do you think there is a particular dollar amount where the creditors will try to challange it? For instance, a $3K balance is probably not going to draw as much attention as a $10K balance or am I mistaken?

If I didn't have to pay the cc mins, I could easily convert to cash and carry.


Thanks!

[lrprn]

When you stop making payments and you don't have the 90+ days between the last time you used cc, doesn't that draw suspicion of fraud? As if you went out and made charges and then didn't try to pay the mins for next month?

The 90 day limit is when the responsibility for proving you didn't file in bad faith shifts from you to the trustee, that's all. There's no sure fire way to predict how a creditor or trustee will react to charges within the 90 day window before filing. A lot depends on the circumstances of your case, how much the charges are for, and what the charges are for. As cc companies are finding their expected windfalls from the new law aren't materializing as expected, there seems to be a trend of more scrutiny about these charges. One creditor pulled a debtor into court to ask when he first met with a bk lawyer as proof he didn't intend to pay charges he made after the first contact (his were big ones!). It's a shifting swamp in the bk courts at the moment

Also, do you think there is a particular dollar amount where the creditors will try to challange it? For instance, a $3K balance is probably not going to draw as much attention as a $10K balance or am I mistaken?

Again it depends on the circumstances in your case, the kinds of charges you made, and what the charges are for. Are you filing Ch 7 or Ch 13?

In our Ch 13 we had three cc's with $12-15K amounts owed on each and others with less than $200 owed. One of our three largest amount cc creditors didn't even file a claim to be paid back through our plan, and several of our lowest amount cc creditors did file claims....we saw no pattern related to the amounts we owed at all. (And by the way, we didn't make any charges during the 90 days before we filed.)

[Spartan]

... I am a no-asset case. All my debt is divorce related. I can't imagine the creditors challenging the charges, but you never know......

If the debts are specified in the divorce decree that you are responsible for them, then I believe those debts are not dischargeable.

[CindyLou]

its not really about whether you made the payments, but instead its the time frame. if it make you more comfortable to make a few payments, then do it. I have dental work done right before I filed. (not on purpose), the note was 150. I paid 75 per month for 2 months. I was a waste of money, but i guess I felt a little better.