Friday, November 8, 2013

Holidays and Bankruptcy

   The holiday season is almost upon us and soon will come the new year. Everyone here at Gaines & Associates, P.C. would like to wish you a happy and safe holiday season.
   During the holiday season many potential clients like to put their personal debt issues to the side and just enjoy the time with their families, and rightfully so. Being with loved ones through the holidays can help many people become less stressed in areas such as debt.
   In January and February many people want to start fresh, and that includes wiping out their past debts. Our firm wants to inform you about some holiday credit card behaviors that can lead to some harmful affects on filing bankruptcy. The most notable pitfall is known as a "credit card binge." Credit card binging is when a person racks up large amounts of credit card purchases and then a few months later tries to discharge the debts with bankruptcy. This happens most around the holiday season due to many clients wanting their family members to have a "great" Christmas.
Credit card binging is addressed in the bankruptcy code Section 523(a)(2)(C) states that:

  1.  consumer debts owed to a single creditor and aggregating more than $500 for luxury goods or services (luxury goods defined as goods or services reasonably not necessary for the support or maintenance of the debtor or a dependent of the debtor) incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable; and
  2. cash advances aggregating more than $750 that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be non dischargeable.
    This holiday season be aware of your spending habits if you are considering filing bankruptcy in the new year. If you have more questions about this topic please call our office. One of our attorneys will be happy to answer any questions!

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