Luxury Goods/60-90 days

[kdinhi]

Hi. I am new here and have a few stupid questions. I have had some significant credit card debt build up over the past three years. I have always made my payments on time and had pretty good credit. Well, I went a little crazy in November/December and purchased a lot of stuff for Christmas on credit. I am suffering from my bad judgement now and have started to research bankruptcy (chapter 7.) In my research I have found some mentions of luxury purchases within 60 or 90 days. Does anybody know where I can find a list of what is considered a luxury good? Also, do I have to make the payments for at least 60/90 before I file or does 60/90 days just have to elapse before filing without payment (trying to decide if I pay bills due at the end of March?) Thanks in advance for any information.

[HHM]

There is no list "per se", but a luxury good is an item that is not a necessity. Also, the charges have to be in excess of $500 within the last 90 days.

Simply wait 90 days from the date of your last major charge, and you will typically be ok.

[monkatom]

do I have to make the payments for at least 60/90 before I file or does 60/90 days just have to elapse before filing without payment

I would also like clarification on this as well?
Thanks

[HHM]

If you charge up a credit card and make NO payments, they may ding you for fraud regardless of the 70/90 day rule.

To answer your question, we need to know how much money we are talking about?

[kdinhi]

If you charge up a credit card and make NO payments, they may ding you for fraud regardless of the 70/90 day rule.

To answer your question, we need to know how much money we are talking about?

I just went over all of my statements and the last luxury purchase was for $1037 and was made on 11/28/07. I have been making my payments and will continue to do so. I thought that maybe I'd skip March's payment which will be due on 3/25 and put that toward my legal fees.

[HHM]

I just went over all of my statements and the last luxury purchase was for $1037 and was made on 11/28/07. I have been making my payments and will continue to do so. I thought that maybe I'd skip March's payment which will be due on 3/25 and put that toward my legal fees.

You should be fine, there should not be a problem with you skipping the march payment. The amount is small enough in the big picture such that so long as you made at least 2-3 minimum payments and wait the 90 days, you should be fine.

Keep in mind, the worst case scenario is that "particular" debt does not get discharged, the rest of your BK should fine.

[CindyLou]

I just went over all of my statements and the last luxury purchase was for $1037 and was made on 11/28/07. I have been making my payments and will continue to do so. I thought that maybe I'd skip March's payment which will be due on 3/25 and put that toward my legal fees.

is that your only purchase? How much debt do you have to be considering bankrupty? If you can give us more information, then we can offer more support

[monkatom]

To answer your question, we need to know how much money we are talking about?

I charged about $1,000 a month on several cards in Sept and October but most was for food, gas, etc the only luxury charge I see is about 500 at Disney. I then made two payments then stopped. On another card I took out a cash advance in September and made 3 payments before stopping payments. The cash advance was for 2400. Do you forsee any problems?

[woeisme]

cash advances are different than luxury items, I might wait 6 months on them just to be safe, from what I've heard they are much more likely to be objected to.

[monkatom]

unfortunately due to wife being on a 10 pay schedule if we wait to file we will not pass means test. i am hoping they do not object as it will be about 5 months from cash advance and it was for only 2,400 that was used to pay mortgage.

[FreshLikeADaisy]

Monkatom, sounds like you need to file anyway (because of the time factor) and just take your chances. You're already outside the window for an automatic win based on the timeframe of the charge, by waiting 5 months. Even if you got a creditor objection filed on that one debt, you could fight it. And if they did win, it's like HHM said: the rest of your debts will be dicharged. So you'd be in a much better position to pay that one cash advance back.

Also, you can move to limit their objection to that one charge, if I remember correctly. So if you owe $12k to Chase, for example, but the problematic charge is only $2400 of that, the remainder of the debt, some $9k, can still be discharged. The fact that you used it to pay your mortgage stands very much in your favor in terms of proving it was not luxury, so the only thing you would even have to consider is whether they could possibly prove that you took out the cash advance without the means or intention of paying it, and I rather doubt that from everything you've written here. So I think you have a pretty good shot if you go ahead and file, and that the benefit of passing the means test far outweighs the risk of a possible creditor objection to a single cash advance. That's my opinion, anyway. Good luck!!!

[monkatom]

Thanks for all teh advice. Yeah it was a 2400 cash advance and that is all that is on that card so even if we lose that fight it will only be for the 2400.
Thanks again. I can not wait to file