DISCLAIMER: The following discussion is for general reading purposes only. Accordingly, anything stated herein should not be relied upon as a legal opinion for your particular fact situation. Bankruptcy case law changes constantly and sometimes daily, accordingly statements contained herein may not be current and up to date with the constant changing court decisions being rendered around the country each and every day. Also every state has their own interpretation of the bankruptcy code, so one issue in Kentucky may be decided one way but in Hawaii a very different result may result concerning the same issue, therefore if you are considering filing for bankruptcy, you should retain the services of an experienced bankruptcy attorney in the state of your residence before filing.
- If you qualify and are successful you can get rid of most "pre-petition debts" (which are debts incurred prior to the date that you filed for bankruptcy).
- Certain taxes can also be discharged.
- Automatic stay stops all garnishments and levies. Stops bill collectors from calling.
- If you file a Chapter 13, you may be able to save your home from foreclosure, you may protect co signers, you can strip off underwater second mortgages or home equity loans, you can reduce your auto loan balance down to fair market value under the 910 day rule and you can lower your auto loan interest rate. You can prioritize certain debts such as co signed debts, priority taxes, delinquent child support, and give them more favorable payment treatment versus your regular unsecured debts. You don't have to pay interest on your unsecured credit cards under your Chapter 13 plan.
- If your filing is abusive or fraudulent you won't get your discharge and will remain liable for all debts. See Section 727. You could also go to prison if you are convicted of bankruptcy fraud
- The trustee could seize and sell your assets, this depends on the equity you have in these assets and the exemptions that are available to you. Previous transfers of money or property could also be set aside by the trustee and the recipient would have to turnover the property that they had received from you back to the trustee. If you fail to accurately value your assets, the trustee could seize and sell them if he determines it is worth more than what you claim it is, and you have used up all available exemptions.
- If you file a Chapter 13, you will have to turn over all future tax refunds to the trustee while you are in bankruptcy. You may not be able to incur new debt such as buy or lease a new car while you are in bankruptcy, especially if it would affect future payments to your creditors, in any event court approval would be required and it is difficult to get that approved.
- Chapter 13 has debt limits whereas Chapter 7 has none. If you are a stock broker or commodities broker you may not be able to file a Chapter 13 bankruptcy.
- If you have student loans and file a Chapter 13 that provides for only minimal payments to all creditors, at the end of your plan duration your student loan debt balance which will include post petition interest may be higher than what it was before you had filed bankruptcy
- If you are in business and have employees a business Chapter 7 filing means that the business ceases operations unless continued by the Chapter 7 Trustee. A Chapter 7 Trustee is appointed almost immediately, with broad powers to examine the business's financial affairs. The trustee generally sells all the assets and distributes the proceeds to the creditors. This means that all employees will lose their jobs. Non exempt inventory will also have to be surrendered to the trustee for subsequent sale. If you file a Chapter 13 and you are in business, depending on how many employees you have and your gross income, you will have to submit regular documentation and proof of payment of taxes and insurance, including tdi, workers compensation premiums to the trustee while you are in bankruptcy.
- If you inherit property or insurance after you file bankruptcy you may have to turn such property over to the trustee.
- If you job requires security clearance with the government, you may lose your security clearance depending on the particulars of your employment history, etc. and level of security clearance that you have.
- Your bankruptcy filing becomes public record and is published in the Pacific Business news. Your credit may be affected for up to 10 years. For more about how bankruptcy affects your credit see, http://hubpages.com/hub/The-Effect-of-Bankruptcy-on-Your-Credit-Report
- Immediately stop using all of your credit cards and do not use your credit cards to pay your bankruptcy attorney fee. Do not participate in credit card kiting, that is where you take out cash advances or use a credit card to pay the minimum balances on your other credit cards, at the same time continuing to use those other cards.
- Do not borrow new money or obtain new loans or obtain any cash advances (payroll cashing services).
- Do not buy or enter into a lease for an automobile
- Do not pay back family members or insiders for a prior debt or loan
- Do not take your name off title or transfer property
- Do not sell or give away any of your assets, especially to a family member or insider for less than fair market value
- If you have a safety box, make an inventory and accurately reveal its contents and value
- Do not hide or conceal any asset, and more importantly disclose all asset and value them correctly from the start.
- Recent luxury purchases over $500 within last 90 days (cash advance for casino gambling is a luxury expense)
- Cash advances over $750 within the last 70 days
- Student loans may or may not be discharged, in most of our cases we find that it is extremely difficult if not close to impossible to discharge student loans, cases where a discharge was granted involved someone who was either disabled mentally or physically, incapacitated and unable to work because of age, health, or other justifiable reason, so if you can work (no matter what the pay is) the chances of you obtaining a discharge will be an uphill and difficult battle. Simply put, not being able to afford the payments is unfortunately not a good enough reason as far as the courts are concerned.. If you wish to discharge your student loans, you need an attorney to file a complaint to determine dischargeability of the student loan, which is an adversarial proceeding, or like a "mini trial" as I call it. At this trial you have the burden of proving undue hardship by a preponderance of the evidence. In the 9th circuit, the courts have adopted the very strict Brunner test, see http://caselaw.findlaw.com/us-9th-circuit/1375187.html .Brunner requires at the very minimum that you made payments in the past towards your student loan debt. Attorney's fees for this kind of adversarial proceeding is not included in a typical "uncontested bankruptcy" case, so you will need extra funds for this kind of legal representation. Legal fees for this kind of trial work can range anywhere from $5,000 to $12,000 or more in additional attorneys fees, especially if legal briefs are required. If you have student loans and if you cannot get rid of them thru bankruptcy, all may not be lost, you still may be able to reduce your debt balance depending upon the kind of student loan that you have, see http://www.studentloanborrowerassistance.org/repayment/repayment-plans.
- Certain income taxes (it depends if you meet the tests)
- Employment related trust fund taxes (100% penalty tax for responsible person)
- Government fines (i.e. traffic fines, etc.)
- Debts incurred by actual fraud, larceny or embezzlement
- Drunk driving related debts
- Credit card or loans made to pay a non-dischargeable income tax (11 USC 523 14a)
- Domestic Support Obligations - if you are behind on domestic support obligations like child support or alimony, the delinquent amounts are considered priority debts and you must cure or pay it back 100% within the term of the Chapter 13 plan. If you file for Chapter 7 the delinquent debts are not discharged in bankruptcy.
- Traffic tickets and violations are not discharged in a Chapter 7 under 11 USC 523a7, it "may" be discharged in a Chapter 13 but it will depend on the court's interpretation of the nature of the crime. You will have to determine if under the laws of the State of Hawaii (penal code) whether parking or traffic violations are a "crime," and if they are then they are not dischargeable under a Chapter 13 as well.
- Post petition homeowner association fees or dues - you will be responsible for all post petition HOA fees that arise after you file for Chapter 7 bankruptcy until such time that your real property is sold at an auction. Thus only your pre-petition HOA fees may be discharged in bankruptcy. Some foreclosures take more than a year before a home is sold so if you no longer live in your home and can afford to wait, you may want to consider waiting until after your property is sold at auction before you file for a Chapter 7 bankruptcy, especially if your homeowner fees are couple hundred dollars a month. If you are filing a Chapter 13 in the 9th Circuit and surrendering your home, there is a "loophole" and you maybe able to discharge post petition HOA fees, see for more discussion, the following: http://hubpages.com/hub/BankruptcyLawyerHonolulu-Getting-rid-of-Homeowner-Assoc-Fees-post-BAPCPA
- Property taxes due for the last year prior to filing for bankruptcy (but if you wait till the auction or sale before you file the new buyer or new mortgage company usually pays that off) and naturally post petition property taxes are not discharged if you are still the owner of the property
- Naturally, all "post-petition" debts (or debts incurred after the date you file your bankruptcy) are not discharged
- Gambling markers: It can be a felony in Las Vegas to have unpaid gambling markers (it depends on the amount of the marker) and they will pursue criminal prosecution if the debt remains unpaid. Whether you can get rid of this debt, read more at http://hubpages.com/hub/BankruptcyHonolulu-Can-you-get-rid-of-Las-Vegas-Markers-in-Bankruptcy . Other gambling debts where a credit card was used can be problematic. In some cases debtors using credit cards for gambling purposes could not get their Chapter 7 discharge - the courts in those cases found that the debts were incurred by false pretenses and that the debtors did not intend to repay the credit card companies. This is not to say that all credit cards gambling related debts are not dischargeable, as there are other cases where the court held that debtors were able to discharge their credit card gambling debts, but if you have these kinds of debts, it is a dilemna with real risks involved. Courts will look at how much you charged, when you charged it, whether you repaid some of it over time, and in one case the court even considered whether the debtor took a gambling anonymous class to stem his gambling addiction habit.
- You could lose deposits due to your banks "right of offset": All funds in your sole or joint account at a bank or credit union (including payroll deposits) can be taken by your lender if you default on their loan (it may possibly include a credit card with them too). Even if you should later file for bankruptcy this "right of offset" that the bank has against your funds will trump any exemption that you try to claim to those deposits.
- You could be forced to turnover property to the trustee because you failed to value them correctly, or if you failed to disclose them from the start. You may also be forced to turnover property to the trustee if you fail to value them correctly, or if you failed to disclose them when you first filed your petition in bankruptcy. In re Peters, United States Bankruptcy Court, N.D. Texas (2011), the debtor filed a Chapter 7 petition and originally valued his personal art pieces in his petition at $2,400, the trustee's appraiser however valued these paintings at $29,000 instead. Because of the debtor's incorrect petition and his false oath at the creditors meeting concerning valuation of the artwork the court denied his bankruptcy discharge. In a recent U.S. Supreme Court case, of Schwab v. Reilly http://www.supremecourt.gov/opinions/09pdf/08-538.pdf , the debtor had originally valued her commercial kitchen equipment at $10,718, however the trustee found a buyer of the equipment for $17,200. As the debtor still had some exemptions left to keep the property's increased value, she tried to amend her exemptions. The trustee objected and the matter went up on appeals all the way up to the U.S. Supreme Court. The Supreme court agreed with the trustee and the property was ordered to be sold. Bascially the debtor was stuck with the value that she had originally given to her assets when she filed her petition and could not claim an increase to her exemptions. Especially if you have artwork, inventory, guns, it would serve you best to get appaisals before you file for bankruptcy. The lesson to be learned from this is that you need to disclose ALL OF YOUR ASSETS, also you must correctly value them before you file your petition. If despite that you are still unsure of a particular asset's value you may want to claim"100 percent fair market value" of the property in question instead of using a "$" or, dollar, amount.
- You could be forced to turnover your home if the value goes up while your Chapter 7 case is still pending. A word of extreme caution here if you own real estate or for that matter any other significant property that appreciates in value while you are in a Chapter 7 bankruptcy. You could lose your residence if it appreciates in value while your case is still pending in bankruptcy, even if you exempted it and you received your discharge from the court. Why is this so? First of all when you claim the federal bankruptcy exemption for your home you are exempting just the "equity", not the property itself. Also when you file a Chapter 7 your property becomes property of the estate until your case is closed (in a Chapter 13 however you generally don't have that problem since your property vests back to you immediately upon plan confirmation, unless the plan or confirmation order provides otherwise.) Getting a "discharge" from the court in a Chapter 7 case is not the same thing as the court "closing" your case and releasing the trustee from his duties, rather these are two totally separate and distinct events. So if your home appreciates in value during the time your case is still pending in a Chapter 7 bankruptcy, the trustee could still seize and sell your residence, pay you the amount you claimed as exempt in your bankruptcy and keep the difference for payment to your creditors. This may not happen to you if you file bankruptcy when home prices are declining but it could happen if you file for bankruptcy when home prices are increasing. If you are concerned about this, please consult with your attorney regarding filing a motion for abandonment, another option would be to file a Chapter 13 instead. For more on this issue, see http://www.abiworld.org/committees/newsletters/litigation/vol4num1/Revoking.html.
- Residence in Hawaii (Different rules apply to rental property) - If you or your spouse have and maintain a residence here in Hawaii, what equity can you keep? It depends on your situation as follows:
- IF YOU ARE SINGLE: If you are single and have a residence in your name alone and if you choose to exempt your property using the "Hawaii state exemption", presently you can keep $20,000* of equity, and this amount increases to $30,000* if you are a head of a family or over age 65; if however you claim the "Federal bankruptcy exemption", then you can keep $22,975* of equity. [*Note: These amounts may change in the future so be sure to update these numbers by checking current statute and applicable laws].
- IF YOU ARE MARRIED AND BOTH OF YOU OWN THE HOME TOGETHER AND BOTH OF YOU FILE TOGETHER: If you are married AND both spouses are joint and equal owners of their home, then the above exemptions can be "stacked" (doubled up) if both spouses file together.
- IF YOU ARE MARRIED AND BOTH OF YOU OWN THE HOME AS "TENANTS BY ENTIRETY" BUT ONLY ONE SPOUSE FILES: Under certain situations the Sawada v. Endo/Security Pacific Bank Washington v. Chang, or "Tenancy by Entirety" case law exemption may be available if only one spouse files for bankruptcy - naturally title to the property must say that it is owned by husband and wife as "Tenants by the Entirety". Essentially this is essentially an unlimited "Hawaii state exemption" and is based upon these Hawaii Supreme court cases, however the filing spouse may not get a discharge by the court if the non-filing spouse also has joint debts (not including the mortgage debt) - this is the trap for the unwary. The Trustee's office will require a credit report from the non-filing spouse to prove that there are no joint debts before the filing spouse will get a discharge, this because the bankruptcy estate’s interest in entireties property is in whatever equity is available in the entireties property that can be liquidated for the benefit of the joint creditors of the debtor AND the non-filing spouse. Also check to see that the debtor has lived in Hawaii for the last 2 years or he cannot claim this exemption and naturally that the debtor is still legally married and no divorce proceeding is pending.
- IF YOU OWN PROPERTY AND IF YOU HAVE A COURT JUDGMENT AGAINST YOU, YOU ABSOLUTELY MUST TELL YOUR ATTORNEY SO THAT HE CAN STRIP THE JUDGEMENT FOR YOU: If you own real or other significant property and there is a perfected or recorded court judgment against your home, to the extent that you can, you should strip off this judgment by filing a separate motion (i.e. Motion to Avoid Judicial Lien) with the court to avoid the judicial lien pursuant to 11 USC 522(f) , if you fail to do so that judgment will survive your bankruptcy and the creditor can go after your home after your case is over, this even though the underlying debt was discharged in your bankruptcy case. So if you have a court judgment against you and fail to let your attorney know, he will not strip off this judgment for you. If your credit reports does not contain court judgments, or if you are not sure if there is a judgment against you, you can go to the Federal and State Court offices (go to both Circuit Court and District Court) to see if there are any judgments against you, if so then you must then check with the Bureau of Conveyances, or any title company in Hawaii to see if these judgments were recorded against your residence. Unfortunately, an IRS tax lien is a "statutory lien" and not a judicial lien, therefore it cannot be stripped off under 11 USC 522(f) in a Chapter 7. This means that even if the tax debt is discharged the IRS could still go after and sell your property that is subject to their federal tax lien after your case is over. See, In re Vermande (Bank N.D. Ind. 1994), and Dewsnup v. Timm, 502 U.S. 410 (1992). In a chapter 13 or a chapter 11, however, it is possible to strip off a federal tax lien if you have no equity in all of your assets or strip down a federal tax lien if you have some equity in your assets. You will need to notify your attorney of the existence of a tax lien in order that he may file the appropriate motion with the court.
- HAWAIIAN HOMELANDS - Yes, this is an asset that you own and the Bankruptcy Code does not have a special exemption for it (other than the real property exemption if it is your residence), thus the Trustee can seize and sell it, if there exists any non-exempt equity. To determine whether you can keep your residence you will need a qualified appraisal to determine what the fair market value is (usually its more heavily weighted towards the value of the improvements since the land is leased and not owned by the debtor) - thus use an appraiser familiar with valuing Hawaiian Homeland property. You can then determine what the equity is after comparing the appraised value with the outstanding loan balance and your attorney can tell you what is exempt or non-exempt based upon the information that you've obtained.
- Did you properly disclose all of your present, as well as foreseeable future income? Wages, tips, cash jobs, lottery winnings, commissions, bonuses, governmental benefits, retirement, pensions, social security, sale of assets, agreement of sale, unemployment, or disablity benefits workers compensation, military reserve pay, regular dividends, taxable 401k or pension withdrawals, alimony, child support, annuities. Are you getting a big raise, bonus, huge sales commission, or any kind of payout, soon? If so you must disclose that.
- Did you list all of your assets? Real estate wherever located, timeshare interest, 401k, IRAs, TSP's, pensions, deferred compensation, annuities, CD's, stocks, bonds, mutual funds, bank accounts, cars, boats, trailers, firearms, motorcycles, mopeds, atv's, cash value of life insurance, annuities, artwork, collectibles, apparel, furniture, furnishings, tv, stereo equipment and speakers, heirlooms, computers, dvds, cds, game software, game playstations, tools, jewelry, business inventory and equipment, receivables, prizes, awards of any kind, sporting items, fishing, camping, exercise equipment, crops, livestock, poultry, farm animals, and even your household pets. Even if you own an asset jointly with others you must disclose and value that partial interest Did you list assets you may be entitled to receive in the near or foreseeable future? (i.e. tax refunds, inheritances, potential lawsuit recovery, lottery payout). Are you a beneficiary of a trust? If so you must disclose that interest.
- Did you value all of your assets correctly and can you keep or exempt them? You may not automatically amend your exemptions if bad faith is involved, so do it properly the first time.
- Did you list ALL of your creditors? You cannot leave any creditor out when filing for bankruptcy.
- If you recently transferred property recently to an insider or family member for less than fair market value you need to disclose that, if you fail to disclose it, it could lead to bigger problems for you.
- If you are or were engaged in business and file for bankruptcy you are required to produce adequate books and records or your case can be dismissed http://www.avvo.com/legal-guides/ugc/chapter-7-debtors-engaged-in-business-must-produce-records
- Totally different rules apply to investment real estate. Not only can you "strip off" a second mortgage that is totally underwater like you can for your residence, but you can also "strip down" your second mortgage even if it is only partially underwater. In addition, you could even "strip down" a FIRST mortgage too, if that loan is partially underwater to the value of the collateral, this would allow you to reduce your mortgage payments if the property is worth less than the mortgage balance since the secured portion would now be limited to the fair market value of the property and not the entire loan balance. The loan balance that exceeds the fair market value of the real estate would be treated as an unsecured claim and could be paid back at pennies on the dollar. How is this possible when it comes to investment real property? Well, Section 506 of the Bankruptcy Code provides that a lien is only secured to the extent there is value in the asset to which it attaches. If a claim exceeds the value of the collateral, that portion of the claim is considered unsecured. As a result, in a Chapter 13, even voluntary liens like mortgages and trust deeds can be stripped down to the value of the collateral as it concerns investment real property (not your residence or home unfortunately). Why is this provision not available to your residence or home? Well, the present bankruptcy code prohibits the stripping of liens that are “secured only by a security interest in real property that is the debtor’s principal residence” 11 U.S.C. 1322 (b) (2). The effect of this is to eliminate a "lien strip down" on residential real property that is the principal residence of the debtor, so unless Congress changes the law in the future, it is what it is for now. Whether you may keep investment real property while filing for bankrupcy is another issue. If it is your primary source of income that you rely upon to meet your daily living expenses, there are cases that have allowed certain debtors to keep the property, if however, you have negative cash flow there are cases that say you may not keep the property because it would be at the expense of paying your other creditors. Once again your attorney should be able to give you some guidance on this based upon case law precedent in your jurisdiction.
(2) Take the median income test, if fail --->You must propose a 5 year plan under chapter 13. There is an exception to this, if you can pay your creditors off 100% of their claims earlier than 5 years, then you plan duration can be shortened. If you fail the median income test, you must also do the means test and if you end up with a positive disposable monthly income amount that falls within the "built in statutory exceptions to the means test" discussed below, then you could still be able to file a Chapter 7.
What does this all mean for Chapter 13 debtors?
1) Voluntary contributions to a pension plan is not allowed for above median income debtors if the Parks decision is applicable or 'stare decisis" in Hawaii, but for below median income debtors in a chapter 13 case, the door is not completely closed, rather these contributions will be evaluated on a case by case basis by the trustee's office and so long as it is 'reasonably necessary' under section 1325b2, then it may be allowed and there is case precedent for it as well. The trustee will look to the debtor's individual circumstances (i.e his age, balance in retirement account, other sources of retirement income, etc.) before deciding to file a motion objecting to the plan or not. For more, see, In re Ng, a Hawaii case: https://www.leagle.com/decision/inbco20120911601.
2) TSP or 401k loan repayments are allowed expenses to above median debtors and since the trustee in the Bruce case, which was a below median income debtor, did not object to such expenses, one could logically make the argument that these expenses are allowable to below median income debtors in a Chapter 13 case as well. See 11 USC 1322f which allows loan repayments to be left alone in a Chapter 13 plan.
In Hawaii, if you file a Chapter 7 and are making voluntary contributions to your 401k, and/or 401k loan repayments the Trustee still has the right to object* on the grounds that the amounts being repaid or contributed towards your retirement account may be 'disposable income' that is available to general unsecured creditors. So in a nutshell, there is no automatic right to deduct these amounts as expenses and the Trustee's office will scrutinize them on a case by case basis. Factors that they look to is whether the debtor is on a constrained budget or not, other factors include employment security, age of the debtor, 401k balance, whether there are other pensions or sources of retirement income the debtor is also entitled to, and the amounts being contributed. For more on this where the debtor prevailed over the Trustee's motion to dismiss, see In re Wilma Horn. SD Indiana. #15-90240. Decided on Jan. 4, 2016.
2. 401k Loan repayments: Ironically, although you can deduct 401k loan repayments in a Chapter 13 case under 11 USC 1322f, it is not automatically allowed in a Chapter 7 case. Factors the Trustee will look at includes the debtor's overall budget, as well as when the loan was taken out and what the loan proceeds were used for (special circumstances may apply for example if the loan was taken out for medical emergency for example), also considered is the amount of the monthly loan repayment and when the loan will be completed. Whether the debtor who is on a shoe string budget and is sacrificing a necessity such as food to make a TSP loan repayment or contribution may stand a better chance of withstanding an objection versus another debtor whose budget is not as constrained and whose car payments are higher than normal).
*Objections by the Trustee's office based upon the debtor's budget. For more about defending against motions to dismiss filed under 707b2 (presumption of abuse) or b3 (bad faith or totality of circumstance) see http://www.sbli-inc.org/archive/2009/documents/U.pdf. Under 707b2 the burden of persuasion shifts to the debtor to prove "special circumstance" to rebut the presumption of abuse. Under 707b3, the U.S. Trustee has the burden of proving abuse under the "totality of circumstance" test, see http://www.kyeb.uscourts.gov/opin/wiseopin/11-51573%20Campbell.pdf. The chilling factor is that you could be liable for attorney's incurred by the Trustee's office if you lose under a motion to dismiss or to convert filed under 707b.
ALLOWABLE SCHEDULE J EXPENSES: Under both Chapter 7 and Chapter 13, you can deduct payroll taxes, union dues, medical insurance, term life insurance if you have a spouse or dependents, union dues, court ordered child support, etc. As far as basic living expenses are concerned, you are allowed Schedule J expenses for reasonable housing, utilities, transportation, clothing, food, toiletries, sundries, grooming, misc cleaning, household and pest control expenses, laundry, out of pocket medical, dental, prescription and co-payments, security monitoring and alarm fees for your family's protection, baby sitting fees if it allows both parents to work, family pet expenses, support of others not living in your household but whom depend upon you for financial basic and necessary support, court ordered child support (if it does not include private school tuition), or alimony, unreimbursed work related expenses necessary to maintain your job, education costs for yourself if required to maintain your present position or to retain your license to continue in your profession, and if you have children (school books, school supplies, A plus, school bus fare).
- You have engaged in a creative or elaborate scheme to conceal assets
- Your petition was filed in bad faith (i.e. it is misleading, not truthful, inaccurate, and contains false information, or you did not list all of your debts). In re Harris WL 1732924 (1st Cir BAP 2008), the debtor listed her large debts but not her small ones (thinking she could preserve her credit by keeping those cards outside of bankruptcy) the court dismissed her case under 11 USC 727a4. http://www.bankruptcylawnetwork.com/a-debtor-must-list-all-debts-in-bankruptcy/. Debtors who voluntarily quit their job then file for bankruptcy (or retire early) may face challenges by the Trustee's office for "bad faith" filing.
- There is egregious behavior or misconduct on your part
- Your testimony is deceptive and/or misleading and you failed to cooperate with the trustee
- You lived on credit beyond your means or you are presently indulged in a lifestyle in excess of a reasonable standard of living
- If you bought a new car and obtained a new loan prior to filing for bankruptcy, the Trustee may dismiss your case as abusive, the rationale being that if you did not have that new loan or debt then you would have had extra funds to pay something back your creditors. This is not a hard and fast rule, however, as there may be a justifiable reason why you needed a new car, such as your other car was totalled in an accident, or there was a recent birth of a twins and your former two seater convertible was not safe and practical for your family needs. (For more, see 11 U.S.C 727 and 707 that discusses how a case can be dismissed on various grounds).
- Credit card "bust outs"; Credit card "kiting"
- Purchase of non-essential goods or services (i.e. entertainment, luxury items, trips, gifts, high fashion, jewelry, gambling, electronics, cash advances)
- Employment status at time of use; Salary or income at the time of charges; Intervening events
- Amounts charged or borrowed
- Repayment history
- Time between filing bankruptcy and credit card use