- November 25, 2013
- Posted by: Richard Feinberg
- Category: Chapter 7 Bankruptcy
Delaying your declaration of Chapter 7 bankruptcy can, in certain cases, have very beneficial effects on the results of your discharge. A St. Petersburg bankruptcy attorney can help you determine when is the best time for you to file, and if it is prudent to wait for certain debts to move into a new debt category before filing for bankruptcy, in order that those debts can be fully discharged under Chapter 7 regulations.
Chapter 7 and Credit Card Debt
Recent luxury purchases (anything over $650) made in the 90 days prior to filing for Chapter 7 protection are ineligible for discharge. This is because of the presumption of ineligibility, a rule put in place that presumes all large luxury purchases made 90 days prior to filing to be made under false pretenses, with the buyer having no intention of ever paying the debt incurred. If you decide to file Chapter 7 bankruptcy while these charges are still in the presumptive phase, the burden of proof is on you, the debtor, to prove that the purchases were not frivolous. If, however, the 90 day period has passed, then the burden of proof shifts to the credit card company, who must them prove that you never intended to pay the debt.
If you wait until these purchases move out of that 90 day window, you stand a much greater chance of seeing them fully discharged in Chapter 7. The credit card company may still challenge the purchase, but if you have made even one or a few token payments it will be extremely difficult for the credit card company to prove any wrongdoing.