Top Five Things You Should Not Buy When Considering Bankruptcy
What’s Happening

LATEST BLOG

“We’ve Been Helping People from Merrillville and Northwest Indiana Get Out of Debt for 20 Years”

Top Five Things You Should Not Buy When Considering Bankruptcy

Top Five Things You Should Not Buy When Considering Bankruptcy
April 03, 2022

Overspending is not the only cause of bankruptcy. In fact, it is not even the leading cause. That distinction, or lack of distinction, goes to high medical bills. So, in this respect, spending has little or nothing to do with bankruptcy. However, there are some purchases to avoid, especially if the purchase is within 90 days of the filing date. If that is the case, a bankruptcy fraud presumption applies. That finding could mean big trouble. Some common problem purchases are listed below.

A Gary bankruptcy lawyer provides solid legal advice before, during, and after your filing. Attorneys help people prepare for bankruptcy. Then, they help people make the most out of their bankruptcy filings, by providing advocacy as well as advice. Finally, an attorney helps people quickly rebuild their credit ratings after they emerge from bankruptcy. These three things, working together, guarantee you a fresh start.

Intangible Luxury Item

Avoid taking expensive cruises or foreign vacations before filing bankruptcy, especially if you finance these trips with a credit card. Bankruptcy fraud is usually easy to prove in such situations. Furthermore, the trustee (person who oversees your case for the judge) often questions the need to file bankruptcy in these cases. People who take European vacations usually do not have problems paying their bills. As a result, the trustee could ask some uncomfortable queries.

Prepaid Rent or Mortgage

Funds in a demand deposit account (DDA), like a checking or savings account, are normally not exempt in bankruptcy. Indiana’s wildcard exemption can usually shield some of this money, but not all of it. Therefore, many people are tempted to prepay housing expenses for a month or two while they have the funds available.

These prepayments may seem like a good idea. But they are usually illegal creditor preferences which a Gary bankruptcy lawyer is hard-pressed to justify. The trustee could force the debtor to reimburse the bankruptcy estate in these situations. If Ben gave his landlord an extra $2,000, the judge could order him to give $2,000 to the bankruptcy trustee.

Tangible Luxury Item

Small luxury items, like a new television set or iPad, are usually not a problem. Large luxury items, like a fishing boat or vacation home, are usually a big problem. Timing (e.g. I had a chance to get a good deal on this item and I could not wait) is usually not a valid excuse.

Jewelry

These items usually fall under the personal property exemption. Most courts do not require itemized exemption lists, so the trustee may never find out about the purchase. But if the trustee discovers the transaction, perhaps because it shows up as an executory contract, s/he will almost certainly claim it was fraudulent, especially if the debtor borrowed money to buy the item.

Large Monthly Contract

Usually, executory contracts are items like finance agreements and wireless plans. Large executory contracts include the aforementioned jewelry purchase and vehicle lease agreements. Technically, debtors have an absolute right to reaffirm these debts. However, if the debtor reaffirms a large number of these agreements, the trustee often questions the need to file bankruptcy.

Reach Out to a Compassionate Attorney

No matter what financial problems you face, bankruptcy could be a way out. For a free consultation with an experienced bankruptcy lawyer in Gary, contact Schmidt, Whitten & Whitten. Convenient payment plans are available.

Categories

MOST VIEWED

Archives

Schedule A Free Consultation

At Schmidt Whitten & Whitten, we offer a free consultation during which we will examine the facts of your case and advise you on how best to proceed

  • nine − 2 =
  • This field is for validation purposes and should be left unchanged.

Our Phone Number219-756-0555
Contact via Emailinfo@kmslawoffice.net
Our Location200 E. 80th Place
Suite 110
Merrillville, IN 46410
We are a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code. This information is designed for general information only. The information presented should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. Past results and testimonials are not a guarantee, warranty, or prediction of the outcome of your case, and should not be construed as such. Past results cannot guarantee future performance. Any result in a single case is not meant to create an expectation of similar results in future matters because each case involves many different factors, therefore, results will differ on a case-by-case basis. By providing certain contact information herein, you are expressly authorizing the recipient of this message to contact you via the methods of communication provided.
Call Now Button