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Fraudulent Credit Card Charges in Bankruptcy

Posted By admin || 26-Dec-2012



Bankruptcy and Fraudulent Credit Card Charges



Credit card debt is one of the most common forms of debt that is discharged or eliminated in bankruptcy. While bankruptcy is a powerful tool that can eliminate qualifying debt, if a credit card company senses fraud in your case, this may reduce chances of the debtor getting debt discharged. So what is the difference between card charges that are fraudulent and legal?

In bankruptcy, a credit card issuer may feel charges on a card are fraudulent if the debtor or card issuer ran up charges they didn't intend to pay back.  Some may even lie to obtain credit in the first place.

The court may view the following charges as fraudulent:

  • Luxury goods, services or purchases of $550 or more within 90 days before your petition was filed.
  • Cash advances made within 70 days of filing that total $825 or more.

The credit card company may choose to challenge other transactions besides those previously mentioned. One of the most important factors includes the timing of your filing. A shopping spree that included a variety of charges right before your filed may raise a red flag. The credit card company would complete a separate process in order to prove credit card charges were fraudulent. This includes filing a complaint, showing up in court and presenting evidence. In such cases, credit card companies don't always come out victorious.

Obtaining legal advice is a good idea when considering bankruptcy. You can discuss credit card transactions you may be concerned about upon filing.  If you are in a position in which you are unable to make payments on your credit cards you should refrain from using them.

Reference:  http://www.thebankruptcysite.org/resources/bankruptcy/bankruptcy-planning/pre-bankruptcy-credit-card-charges-legal-vs-fraud

Categories: Credit and Bankruptcy
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