You May Not Always Come Out Debt Free from a Bankruptcy
If you are thinking that filing for bankruptcy will always solve your money problems, the lawyers at Skrupa Law want you to know the truth is that it may not. It is true that debts are usually wiped away; however, in some instances a creditor can object to a discharge of debt.Let us explain–when you file for Chapter 7 bankruptcy, it allows you to discharge your unsecured debts at the end like Discover Card, Visa, American Express, or MasterCard. This bankruptcy discharge will say creditors can no legally longer seek payment from you. However, if the creditor does not agree that the debt should be discharged, they can then file an objection with the bankruptcy court. Credit card companies are the most common ones to do this, but any creditor can do this as well.
What to Expect with Credit Card Companies During Bankruptcy
Our bankruptcy lawyers at Skrupa Law say not to worry though, it is extremely uncommon for credit card companies to challenge your whole bankruptcy; they are just seeking the money owed to them. However, a credit card company may win this objection based on three things: if you willfully lied on the credit card application, had no intention of paying back the debt in the first place, and/or charged $500 or more on the credit card within 90 days of filing bankruptcy.
The following are examples of objections that could end with you still having to pay the debt to the certain credit card company.
- If you used your credit card a high number of times for small charges right before filing for bankruptcy. The credit card company will see this as fraud because small charges are usually made to avoid suspicion. We’ve got news for you; it IS suspicious.
- If you lie about your personal financial history like your annual income to obtain a card or a higher credit limit, then you are subject to objection from the credit card company.
- Did you use your credit card within 90 days of filing for bankruptcy for $500 worth of charges or more than $750 worth of cash advances within 90 days of filing? This is considered abuse of the bankruptcy process because the intent of the credit card was misused. The credit card companies will come after you for their money if you are not honest.
Tip: Stop using your credit card 90 days or more before filing for bankruptcy. This will leave no room for objections to be made.
Contact Skrupa Law at (402) 571-2900 (Omaha) or (402) 464-3311 (Lincoln) Today!
At Skrupa Law we specialize in bankruptcy and we want to help lessen your debt stress. If you have any questions or concerns about bankruptcy objections or debt, please make it a point to contact us in Omaha at (402) 571-2900 or our Lincoln office at (402) 464-3311. We are in the business to help you.