Kentucky Bankruptcy Law

Counsel with Care

Just in time for Christmas

If you are rushing out in the next couple of days to buy that ‘just right’ present for someone special on your list, but you have been struggling financially, beware. If your debt struggles have mounted to the point where you are faced with filing bankruptcy, then as I’ve cautioned before, large purchases are to be avoided.

The term “large purchases” is relative and so the bankruptcy code spells it out in 11 USC 523(a)(2)(c). Purchases TOTALING $500.00 or more to a single creditor in the 90 days prior to a bankruptcy are presumed to be non-dischargeable. This does not apply to routine purchases necessary to the household, such as groceries.

That same code section keeps cash extensions of credit totaling more that $750.00 dollars within 70 days of filing bankruptcy are also presumed to be non-dischargeable. If you file bankruptcy, you will have to produce bank records and the trustee or a creditor can object to such purchases or case advances.

So, resist the urge to impress that certain someone with a large gift; instead, focus on the true meaning of Christmas.

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December 21, 2011 - Posted by | Chapter 13, Chapter 7 | , , , , ,

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