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Credit Card Fraud in Chapter 7 Bankruptcy

Posted By Allmand Law Firm, PLLC || 4-May-2016

While most credit card debt is dischargeable in a Chapter 7 bankruptcy, there are occasions when a judge may require a debtor to repay a lender. The most common reason for judges to require repayment of credit card debt in Chapter 7 bankruptcy is if the debtor committed fraud. In other words, if the judge determines that the debtor charged up a high balance on their card without any intention of paying it back.

Creditors who suspect fraud from an individual filing for bankruptcy can have the judge review the case for evidence of this accusation. One of the telltale signs is the incurring of large credit card charges after consulting with a Chapter 7 bankruptcy lawyer, or finding that the individual’s bankruptcy fees and expenses were paid with a credit card. Judges will also look at credit transactions in the months leading up to the bankruptcy filing. Often, people mistakenly assume that since they are already going to file for bankruptcy, they can safely make huge purchases without worrying about having to pay them back. However, this too is considered fraudulent behavior, which may result in the debt not being eligible for a discharge. If the judge finds that you made no attempts at repayment on purchases made just before a bankruptcy filing, you may end up still having to pay the debt, which defeats the entire purpose of a bankruptcy filing.

Fraud is a very serious matter when it comes to bankruptcy. To avoid having your Chapter 7 bankruptcy complicated or even denied due to fraud, it is best to avoid any use of your credit card once you begin considering Chapter 7 bankruptcy. It is in your best interests to speak with a Dallas bankruptcy lawyer at Allmand Law Firm, PLLC about the bankruptcy process and how it can benefit you. We are here to guide you through the process and help you avoid any potential complications.

Initial case evaluations are provided free of charge, so contact us today to take your first steps toward financial freedom.

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