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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2539
Experience:  Better Business Bur 15yrs bankruptcy experience. Chicago Bar
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Ive reached the point when I cant pay my cc bills and cover

Resolved Question:

I've reached the point when I can't pay my cc bills and cover living expenses. My plan is to just stop paying the cc bills this month and file Ch 7 next month. Am I better off paying a little, or none at all this month? Does it make any difference?
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 4 years ago.
Hi and thanks for your question. Under the bankruptcy code, creditors can object for recent usage on any one account who's total usage during the 90 days before filing exceeds $600. So, if you have not been using the card and have been making the minimuns, then you should have no problem filing any time, and you shouldn't pay them any further. If your total usage on any one was more than $600 during the last 3 months, then I would recommend waiting 90 days to file, and make the minimum required payments. Talk with a local bankruptcy attorney to review the charges and payments you have to determine the best time to file in light of the other facts in your case. Thanks and good luck.
Customer: replied 4 years ago.
It was my understanding that it was any single charge over $600, rather than an aggregate of $600. This was from a friend who recently filed here.
Expert:  Terry L. replied 4 years ago.
aggregate. Good luck.
Here is the code section:

11 USC 523 (a)
(2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by--

(A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition;

(B) use of a statement in writing--

(i) that is materially false;

(ii) respecting the debtor’s or an insider’s financial condition;

(iii) on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied; and

(iv) that the debtor caused to be made or published with intent to deceive; or

if ( showRev ) { document.write("

(C) for purposes of subparagraph (A) of this paragraph, consumer debts owed to a single creditor and aggregating more than $1,000 for "luxury goods or services" incurred by an individual debtor on or within 60 days before the order for relief under this title, or cash advances aggregating more than $1,000 that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 60 days before the order for relief under this title, are presumed to be nondischargeable; "luxury goods or services" do not include goods or services reasonably acquired for the support or maintenance of the debtor or a dependent of the debtor; an extension of consumer credit under an open end credit plan is to be defined for purposes of this subparagraph as it is defined in the Consumer Credit Protection Act;

") }

(C)

(i) for purposes of subparagraph (A)--

(I) consumer debts owed to a single creditor and aggregating more than $500 [document.write("$"+adj523a2Ci$)$550] for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable; and

(II) cash advances aggregating more than $750 [document.write("$"+adj523a2Cii$)$825] that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be nondischargeable; and

[Dollar amounts in subsections 523(a)(2)(C)(i) and (ii) are adjusted on April 1 every 3 years by section 104. Adjusted amounts effective document.write(rev)4-1-07 are in brackets.]

(ii) for purposes of this subparagraph--

(I) the terms "consumer", "credit", and "open end credit plan" have the same meanings as in section 103 of the Truth in Lending Act; and

(II) the term "luxury goods or services" does not include goods or services reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor.

Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2539
Experience: Better Business Bur 15yrs bankruptcy experience. Chicago Bar
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