If people decide to declare bankruptcy, what prevents them from aquiring & reaching limits on c cards rt b4 B?

Question

Is there anything that would prohibit a person aquiring multiple credit cards and spending excessively right before filing for bankruptcy.

Answer 1

Under those circumstances, the debtor would have two problems. First of all, the creditors would most likely file an action called and adversary proceed to keep you from getting a discharging of any recently incurred or fraudulently incurred debt. You could also be denied a discharge in the entire case. Second, bankruptcy filings are down at least 80% nationwide, to the U.S. Attorney's office has more time to fulfill their mandate under the new law to prosecute debtors who engage in bankruptcy fraud.

Answer 2

Nothing prevents you from obtaining the credit cards and using them excessively. If you are contemplating bankruptcy you might consider that credit card issuers sometimes challenge the discharge of their debt in bankruptcy by filing an adversary proceeding claiming that the debt was incurred by fraud and therefore should be excluded from the discharge. This is sometimes called a "non -dischargeability action". Credit card debt may be non dischargeable in bankruptcy under either of two legal theories:

* The application submitted to get the card was fraudulent
* The card was used without an intent to repay; this is far more common

This issue used to arise only in Chapter 7 prior to the 2005 bankruptcy code amendments. Now, creditors can contest the discharge of debts in a 13 as well based on a claim of fraud.
Each card issuer has a different practice about non dischargeability actions-the following circumstances probably increase the likelihood that the debt may be subject to challenge by the creditor:

* Increase in credit card usage shortly before filing
* Newly issued card
* Large cash advances in months before filing
* Use of card for recent travel or vacations
* Pattern of borrowing on one card to make payments on others
* Exceeding credit limit
* Using card when unemployed or without reasonable belief that the debt can be repaid
* Large balance at filing
* Charges made after consulting bankruptcy lawyer

Generally, the longer the length of time between any particular use and the bankruptcy filing the less likely the usage will trigger a challenge to dischargeability. A complaint for dischargeability based on fraudulent use of the card may seek non dischargeability for certain of the charges, not necessarily the entire balance. Judges decide if the debt was incurred by fraud, thus barring the discharge of the debt.

Answer 3

There's nothing stopping anyone maxing out there credit cards or obtaining as much credit as they can possibly attain, But if you decide on petitioning for a personal bankruptcy be warned a judge decides whether or not a person is eligible for one. In the course of obtaining the bankruptcy the courts get every piece of info from you, tax payments, wages details, absolutely everything about you is there's to know, they even freeze you bank accounts and have full access to these. OK so during the bankruptcy the judge notices you've ran up a huge amount of debt in a short time he will simply dismiss the petition thus you lose you hundreds of pounds it cost to apply in the first place. What happens then i don't know as my petition was successful. try the site Ive given for a bit more info.

Answer 4

Yes. I believe when you file for bankruptcy, there are limits to how recently you acquired the debt and what you can include in your bankruptcy. So if you max out your credit cards then a couple of weeks later file for bankruptcy, those recent purchases will not be included in your declared debt (you still have to pay those recent additions to your debt).

Answer 5

It's a crime if they can prove it and the person could get jail time. Besides which, it is extremely difficult to get a full bankruptcy. Most bankruptcies simply provide decreased payment plans for all outstanding debt.