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I have read that making a major purchase prior to filing can be considered fraud since we know we will be filing chapter 7. Can our bankruptcy be denied because of this purchase?
I have read that making a major purchase prior to filing can be considered fraud since we know we will be filing chapter 7. Can our bankruptcy be denied because of this purchase? Response: The "major purchase" is your home. You need to have a roof over your head. So long as you are making payments on the purchase, you would be able to overcome the creditor's potential claim that you obtained the credit by false pretense. Also, if you make any purchase before the bankruptcy filing, you should make sure not to file for bankruptcy protection within 90 days of the purchase. There is a presumption that debt acquired during 90-day of bankruptcy filing is acquired by false pretense with the debtor not having any intention to pay the debt. The creditor must actually file complaint to assert this right and prevail in order for the affected debt not to dischargeable. Most creditors do not file this complaint if you are actually making payment on the purchase. Nonetheless, if you file for bankruptcy 91 days after the purchase, the purchase would be out of the presumption period. In addition and more importantly, if you are making payments on the purchase you would able to rebut the presumption that you obtained credit with no intention to pay. Can our bankruptcy be denied because of this purchase? Response: No.
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