If You Are Considering a California Bankruptcy Discharge: Be Wary Of Incurring New Debt Before Filing

Posted by on Sep 1, 2011 in Discharge in Bankruptcy | 0 comments

Oftentimes, as an attorney, I am asked by bankruptcy clients whether it really matters if clients incur new debt by continuing to rely and use credit.  The short answer is YES, IT MATTERS. 

The California bankruptcy discharge under federal bankruptcy law has several pitfalls to the continued use of credit including a presumption of fraud for charging luxury goods within 90 days before filing or taking cash advances within 70 days respectively.  These pitfalls can be found under 11 U.S.C. Section 523 of the bankruptcy code.  What is a luxury good?  The bankrutpcy code fails to define it, but one can think of it as a good that is not necessary to support the debtor or the debtor’s dependants.

JCH Law Firm has experience dealing in these matters.   As an experienced and capable Southern California Bankruptcy Attorney, I have successfully resolved and warned clients of creditor’s claims that could arise from such situations.  Bankruptcy attorneys must ask their potential clients the relevant questions before a bankrupty case is filed to flush out these potential issues that may arise post-petition.

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