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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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If you purchased items on a credit card as legitimate gifts

Customer Question

If you purchased items on a credit card as legitimate gifts for people... And you end up filing BK, what can the creditor do? We are talking less than a thousand dollars.

We found out we are about to lose a court case and are going to have to file BK for the judgment... Can they make the people give the gifts back? Or make me reaffirm the debt?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 1 year ago.

cfortunato :

Hi - my name is XXXXX XXXXX X'X a Bankruptcy and Consumer Protection attorney here to assist you.

Customer: Howdy
Customer: I realize that certain debts can be forced to be reaffirmed I'd they are considered luxury items.
Customer: If*
cfortunato :

The rule is debt for luxury items - including gifts - is presumed to be non-dischargeable if you charged more than $600 to any one creditor within the 90 days before filing a Bankruptcy.

Customer: $600 an item, or $600 total?
cfortunato :

$600 for any one creditor.

cfortunato :

$600 total for any one creditor.

Customer: should we just postpone filing for BK for at least four months then?
cfortunato :

It does not matter if you charged more than $600 total, as long as you did not charge $600 with any one creditor.

cfortunato :

Did you charge $600 or more with any one creditor recently?

Customer: Yes. We have two credit cards we have been living off of. If we stopped using them now, the 90 days would start?
Customer: weve had to.
cfortunato :

If you used the credit cards to live, that does not count. The problem is only with the purchase of things you did not need - including gifts.

cfortunato :

If you used the credit cards for every-day necessities, it does not matter how much you charged.

cfortunato :

Every-day necessities, such as food, rent, gas, utilities, etc.

cfortunato :

Cable, internet also.

Customer: So I can make a car payment with a credit card and the luxury 'test' does not apply?
cfortunato :

Phone.

cfortunato :

Yes.

Customer: i did not know that. Thanks for answering my question
Customer: Back to watching Game of Thrones. ;)
Customer: have a good night.
cfortunato :

If you need to car to get to work or school or for groceries, etc.

cfortunato :

You too!

cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience: Bankruptcy professor.
cfortunato and 4 other Bankruptcy Law Specialists are ready to help you

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