Cash advance before bankruptcy proves non-dischargeable

Cash advance before bankruptcy proves non-dischargeable

If you are lured by the idea that you can pull down as much money as you wish from your credit card only because you are going to file bankruptcy, let me confirm you that your intent will be deemed to be fraudulent by the court. Under 523(a) (2) an adversary proceeding' may be filled by your creditor appealing the court to impose non-dischargeability action' upon you. This is a common phenomenon that some people take instant cash advance from their credit card before filing bankruptcy, presuming that they do not have to pay it back. However, it is not true. Under bankruptcy law which may slightly vary from state to state, you cannot issue more than a certain amount of money within certain period of time span prior to bankruptcy. However, if you still wish to draw some money from your credit card you must pay them through a debt settlement with your creditor. Otherwise, you can do it by filing chapter 13 Bankruptcy which would be appropriate as it requires you to pay through installments.

Now let me tell you what are the set norms laid down by the federal law court. These laws are designed to ensure that no one can amass a creditor's money in a fraudulent way and squeeze away from his clutch after filing Bankruptcy. In most of the state, the law says you cannot take out more than $750 dollars within 70 days prior to filing bankruptcy. In California the law is slightly different. It states that within 90 days prior to bankruptcy if any one borrows money over $825, it will be deemed to be non-dischargeable'. And if over $550 is used to purchase non essential commodity, it will also be presumed to be non dischargeable'.

Doesn't it sound contradictory when a person appeals for bankruptcy for his insolvency but at the same time purchasing luxurious watch on credit? That is why it will be considered to be an appearance of misconduct. Such explicit evidence of dishonesty may lead the court to reject your appeal immediately.

Somebody uses the amount of cash advance to transfer it to his friends and family in the form of gifts. But this also is regarded as a fraudulent practice as the person gives away money on the presumption of getting it back after bankruptcy.

At this point you can avail some strategy or use some tact in order to tilt the situation in your favor.

You can halt for some days more or extends the date of filing bankruptcy from the time of alleged usage of credit card.

You can certainly come into a negotiation with your nagging creditor to settle the matter by yourselves.

Another strategy you can apply that is you have to look for any person who is going to spend his money. Then pay for his purchase and later take the money from him and then pay your creditor back. This is considered to be a fair transaction.

Warning- Before filing bankruptcy, it is always wise to transfer all the assets of your existing open bank accounts to another banking institution. The court may look to get access to the other liquid assets deposited in all your account to pay your creditor. Therefore, shift all those assets to any other account not associated with any unsecured debt.

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Source : http://www.cashadvance.com.au/cash-advance-before-bankruptcy-proves-non-dischargeable/

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