What Happens If I Max Out My Credit Cards Before Filing For Bankruptcy?

Running up the balances on your credit cards just before you file for bankruptcy is a bad idea. Here’s why.

Moody, AL–Bankruptcy offers debtors some level of relief when they’ve accrued more debt than they can afford to pay back. While many individuals turn to bankruptcy courts for help with their medical debt and credit card debt, there are plenty of other types of debt that can be discharged through bankruptcy.

Although bankruptcy is often used to wipe away most if not all of a person’s credit card debt, you shouldn’t rack up the balances if you plan on filing for bankruptcy and know you won’t be able to pay back the money you spend. This is the reason why.

If you max out your credit cards before filing for bankruptcy, it may be viewed as fraudulent behavior.

When you file for bankruptcy, the trustee that is assigned to your case will comb through your finances and assess your spending. If they see that you racked up high balances on your credit cards just before filing, they may view it as an act of fraud.

Most of the people who seek bankruptcy protection and spend on their credit cards just before filing know they won’t be able to pay their creditors back. Their creditors also know this which is why they can request that the bankruptcy court deem the debt as “non-dischargeable.” This means you will still be responsible for the debt even after you emerge from the bankruptcy proceedings.

Depending on the circumstances, the court may even decide not to accept your case. So, when you rack up the balances on your credit cards just before you file for bankruptcy in Alabama, you run the risk of having to still pay the money back or having your case thrown out.

A Moody, Alabama bankruptcy attorney can help you avoid common mistakes made before filing for bankruptcy.

Aside from watching how you spend, there are a few other things you’ll want to avoid doing if you plan on declaring bankruptcy in Alabama. Want to find out what these are? A Moody, Alabama bankruptcy lawyer can explain. Hill, Gossett, Kemp & Hufford, P.C. is an experienced and trusted bankruptcy law firm located in Alabama that can address all of your bankruptcy questions and concerns.

You can reach Hill, Gossett, Kemp & Hufford, P.C. at any of their office locations listed down below to set up a time to discuss your situation with a bankruptcy lawyer in or nearby Moody.

Have questions about this article or a legal concern? Call 800-672-3103.

Disclaimer: No representation is made that quality of legal services provided is greater than the quality of legal services provided by other attorneys.

Hill, Gossett, Kemp & Hufford, P.C. can be reached at:

Moody Office

2603 Moody Parkway, Suite 200

Moody, Alabama 35004

Phone: (205) 640-2000

Website: www.hwhlawgroup.com

Leeds Office

7900 Parkway Drive

Leeds, AL 35094

Phone: (205) 699-5500

Springville Office

6441 U.S. Highway 11