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Roger
Roger, Attorney
Category: Bankruptcy Law
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Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by West
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We are about 15 months into a five year chapter 7 repayment

Resolved Question:

We are about 15 months into a five year chapter 7 repayment plan. One of the things we were told when we filed is that no new credit can be applied for or taken out as that BK trustee would say, he if you charged X and you can make a monthly credit payment of Y, then that payment should be going towards your repayment plan.

We are not looking to open any new credit lines, nor do I think we would qualify for any with our credit since filing BK 7. My question is this. I have an existing BillMeLater account that I have had for about nine years. Our main tube tv blew out and we were looking to get into a new on sales inexpensive replacement. Something under $500 or so. Is this acceptable? Is this allowed since its not new credit, but an existing line? Will this raise a red flag. Thanks Mike
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  Roger replied 2 years ago.

Hi - my name is XXXXX XXXXX X'm a Bankruptcy litigation attorney here to assist you.

 

Are you in a Chapter 11 or 13? A Chapter 7 is not a repayment plan bankruptcy; it is a liquidation. Thanks for the information.

Customer: replied 2 years ago.

Sorry,

 

I am in 11, the one you have five years to pay back on vs. a 13. I think I had to go this route due to the income I had at the time. Sorry, I thought it was 7.

Customer: replied 2 years ago.

The trustee's letterhead says Chapter 13 Trustee on it.

Customer: replied 2 years ago.
Chapter 13.
Customer: replied 2 years ago.
Chapter 13 is on the trustee's letterhead.
Expert:  Roger replied 2 years ago.

Ok. Thanks. Usually a business files an 11 and an individual files a 13.

 

The rule is that you're not allowed to incur any new debt. IF you borrow money/use credit for a new TV, you are incurring new debt. Thus, you're going to have to file a motion with the court to borrow the money from your existing line of credit. As long as you can show that you're able to repay the money and that it will not impact your ability to make your plan payments, the court should approve it.

 

However, you are going to need to get court approval to be legal in doing this.

Customer: replied 2 years ago.

So to prevent all of this, I could just have a family member purchase the item and I can pay them back as I am not incurring any new debt or credit lines?

 

So to repeat back what you have just told me, we cannot use any existing credit lines in our names to make this purchase without prior court approval? If we do not get prior court approval, we risk some legal issues with the court or trustee correct?

Expert:  Roger replied 2 years ago.
Your plan should account for cost of living expenses that you'll continue to incur, but you're not supposed to incur
any new debt without court approval.

If a family member would purchase the tv for you, that's fine.
Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 26094
Experience: BV Rated by Martindale-Hubbell; SuperLawyer rating by West
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