Avoiding Credit Card Disputes
Under the bankruptcy laws enacted in 2005, bankruptcy petitioners need to be more cautious about their credit card use than ever before. It’s not just because bankruptcy courts can dismiss bankruptcy petitions over what they deem to be overtly fraudulent use – it is because card lenders can file a dispute to block your bankruptcy petition.
Understandably, credit card lenders want to ensure that they collect on your debts and then some – and if they see that you are preparing to file a petition for bankruptcy, they will look for every excuse in the book to block your petition. The 2005 bankruptcy laws have made it easier for lenders to do so because credit card companies sponsored them.
Therefore, if you want to ensure you can file for bankruptcy without experiencing any hiccups in the form of sneaky credit card lenders, here’s what you need to know:
1. If you absolutely have to use your card to purchase necessities (for example, you need to buy groceries or pay for utility bills), try to use just one card for your purchases. If your credit limit won’t allow you to do so, then use as few cards as possible to make those purchases. Credit card lenders can dispute your bankruptcy filing if they believe you have been juggling your credit to make multiple purchases. On that note, keep all of your receipts – that way, if lenders dispute your charges, you can prove it was for essential items.
2. If you made large – and potentially extravagant – purchases with your card within 90 days of filing for bankruptcy, return the items so the money can be refunded to the card. While credit card lenders can dispute charges made as far back as one year from the bankruptcy filing, legally speaking, you only need to answer for those made in the last 90 days from filing for a Chapter 7 bankruptcy or a Chapter 13 bankruptcy .
3. Take note of what magic number brings about the attention of credit card lenders. Lenders will usually dispute debt dismissals of over $10,000; however, this may vary in different districts, so don’t expect to get off totally scot-free if you have just under ten grand in credit charges.
These tips and techniques will help you eliminate one more obstacle in the form of your credit lenders and make your bankruptcy filing go much smoother.