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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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I have been using credit cards to help with my finances. My

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I have been using credit cards to help with my finances. My situation has gotten worse now that I'm losing income from my rentals and my monthly mortgage has increased. I am considering using credit cards to pay the mortgages, but there may come a time where I run out of options and will have to stop making mortgage payments. It may take several months, but at some point I will probably be forced to claim bankruptcy. Will I get in trouble for using credit cards?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.

Hi JACustomer,

The general rule is once you actually decide to file a Bankruptcy (not just thinking about doing so), you are supposed to stop using your credit cards. This is because debt that is incurred with no intention of paying it back is considered to be non-dischargable. Bankruptcy Stat. 523(a)(2)(A).

The other type of debt that is presumed to be "fraudulently" obtained - and therefore non-dischargable - is debt of over $600 to one creditor made within the 90 days before filing and used for "luxury goods and services". Bankruptcy Stat. (a)(2)(C).

Since mortgage payments are not considered to be "luxury goods and services", if you are using the credit card with the intention of paying them back, and whether or not you actually will be able to pay them back, you should not get into trouble for using them.

 

I think this is what you wanted to know. If not, please let me know.
Thank you!

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