Is this really fraud?

[mountanddo]

I am interested after reading a couple of posts on here regarding what would be considered fraud in dealing with money issues.

Someone posted that they were going to see an BK attorney and was wondering if they could use their credit cards in the meantime to pay for daily living expenses such as food and gas. The response was that if you are even thinking about filing for BK and are using your cards with the intent not to pay then you are committing fraud.

Now on another post someone filed BK, their mortgage was discharged and they didn't reaffirm their first or second mortgage but have been paying on it. They are planning on buying a new house and just walking away from the old one.

I guess I just don't understand the reasoning with some of these posts. It seems that buying a house with the intent to just walk away from another whether or not it was discharged in your BK or LEGAL to do so would be worse than trying to survive with what little resources you have at the moment.

I realize that one might be legal and one not but really one situation is trying to survive and one is taking advantage of the system in a legal but less than honest way in my opinion.

Any thoughts? Thought I'd open this up for discussion.

[Freddy03]

I am interested after reading a couple of posts on here regarding what would be considered fraud in dealing with money issues.

Someone posted that they were going to see an BK attorney and was wondering if they could use their credit cards in the meantime to pay for daily living expenses such as food and gas. The response was that if you are even thinking about filing for BK and are using your cards with the intent not to pay then you are committing fraud.

Now on another post someone filed BK, their mortgage was discharged and they didn't reaffirm their first or second mortgage but have been paying on it. They are planning on buying a new house and just walking away from the old one.

I guess I just don't understand the reasoning with some of these posts. It seems that buying a house with the intent to just walk away from another whether or not it was discharged in your BK or LEGAL to do so would be worse than trying to survive with what little resources you have at the moment.

I realize that one might be legal and one not but really one situation is trying to survive and one is taking advantage of the system in a legal but less than honest way in my opinion.

Any thoughts? Thought I'd open this up for discussion.

I think the difference is pre and post BK. The new mortgage is not fraud b/c he/she is not responsible for the one that was discharged.

[tobee43]

just imhp...there is a law pertaining directly to use of or of using your cards 90 prior to filing. one jeopardizes the possibility that creditor will file an ap and possibly win due to the time period and that the person used them knowing they were going to be filing.

while i understand it may seem a bit unfair and i'm not certain if a trustee could or would look at a credit card statement that only shows purchases of food on it, would really care if the 90 day "rule" was in fact broken, for one would be hard press to want to find out.

whereas in the housing situation the pay and stay scenarios while not seemingly "fair" to the banks, it's really more than one taking advantage of the legal process. after all, the banksters take the first opportunity THEY can to grab us in one way or another, so my theory on this type of situation is if the law didn't allow it, people most likely may consider to do it anyway, just not as readily as they do now. i do think when people do get their NOD's most, i believe, abide by them and leave. so i think you are correct, if one is not breaking the law and until it actually is considered fraud then people are more likely to use that opportunity to save money. we i admit did.

also was it less honest that many people were hooked by the banks thinking everything was going to be alright and allowing them to borrow borrow borrow? i also know that issue is in much debate as people say, well....these people should have known better and never took the money in the first place. right...dangle the golden carrot in front of those that have done without their entire lives and expect them to just walk away. temptation was too great for too many. i'm not saying that was right. however, if the banks used the "old" way to allow borrowing for housing...like 20% down and only 1/4 of your monthly salary to cover housing cost, maybe many would not be in the position they are in today???

[BKAttyMI]

This is more to do with "intentions". When you obtained or used the credit, did you intend to pay it back? That's the question you need to ask. When you took out the mortgage on the house, did you intend to walk away from it? Or pay it off? When you charged the gas on your credit card, did you intend to pay it back? Or default on it?

Obtaining credit with the intent of not paying it back is fraud. That's why theoretically, as soon as you KNOW you won't be able to pay back a charge to a credit card, you should discontinue using those cards.

[IamOld]

Well said tobee!!!

just imhp...there is a law pertaining directly to use of or of using your cards 90 prior to filing. One jeopardizes the possibility that creditor will file an ap and possibly win due to the time period and that the person used them knowing they were going to be filing.

While i understand it may seem a bit unfair and i'm not certain if a trustee could or would look at a credit card statement that only shows purchases of food on it, would really care if the 90 day "rule" was in fact broken, for one would be hard press to want to find out.

Whereas in the housing situation the pay and stay scenarios while not seemingly "fair" to the banks, it's really more than one taking advantage of the legal process. After all, the banksters take the first opportunity they can to grab us in one way or another, so my theory on this type of situation is if the law didn't allow it, people most likely may consider to do it anyway, just not as readily as they do now. I do think when people do get their nod's most, i believe, abide by them and leave. So i think you are correct, if one is not breaking the law and until it actually is considered fraud then people are more likely to use that opportunity to save money. We i admit did.

Also was it less honest that many people were hooked by the banks thinking everything was going to be alright and allowing them to borrow borrow borrow? I also know that issue is in much debate as people say, well....these people should have known better and never took the money in the first place. Right...dangle the golden carrot in front of those that have done without their entire lives and expect them to just walk away. Temptation was too great for too many. I'm not saying that was right. However, if the banks used the "old" way to allow borrowing for housing...like 20% down and only 1/4 of your monthly salary to cover housing cost, maybe many would not be in the position they are in today???

[SunshineGal]

Hi Mountanddo,

BKAttyMI has summed it up well in regards to using the credit cards. As for the mortgage and walking away, that debt was *discharged* through the bankruptcy. Your friends are no longer obligated to repay that debt. Hope that helps.

SG

[AngelinaCatHub]

This is more to do with "intentions". When you obtained or used the credit, did you intend to pay it back? That's the question you need to ask. When you took out the mortgage on the house, did you intend to walk away from it? Or pay it off? When you charged the gas on your credit card, did you intend to pay it back? Or default on it?

Obtaining credit with the intent of not paying it back is fraud. That's why theoretically, as soon as you KNOW you won't be able to pay back a charge to a credit card, you should discontinue using those cards.

Also well said. Also the CCs are almost always discharged as non-secured debt. Other debt has intrinsic value. As I said in the aforementioned thread, this is call "constructive bankruptcy". Nothing but fraud with intent. 'Hub