Bankruptcy and Holiday Season Planning: Things to Consider
If you are currently struggling with debt and have been considering the possibility of filing for consumer bankruptcy in South Florida, it is important to have a clear understanding of how a bankruptcy case can be impacted by holiday season spending. In other words, it is essential to learn more about how spending prior to a bankruptcy case can affect your eligibility for a discharge, along with other potential consequences. As such, for debtors asking themselves whether it makes sense to file for bankruptcy before or after the holidays, there are particular considerations to keep in mind.
Ultimately, you should discuss your particular financial situation with a bankruptcy attorney in West Palm Beach to make the best decision for you based on your circumstances. In the meantime, we can give you more information about things to consider when it comes to bankruptcy and holiday season planning.
Negative Effects of Accruing Debt Immediately Before Your Bankruptcy Filing
Anyone who is presently thinking about filing for bankruptcy immediately after the holiday season, assuming that any purchases made or debt accrued as part of holiday gifts or travel can be handled in the bankruptcy case, should understand how “luxury” purchases and cash advances can impact a bankruptcy case. In short, there can be negative consequences of accruing certain forms of debt immediately before your bankruptcy filing, including debts associated with holiday season gifts, holiday travel, house decorating, and more.
In short, these kinds of debts likely will not be discharged, and they could even result in bankruptcy fraud concerns. Under US bankruptcy law, the term “luxury” goods refers to purchases in excess of $800 made within 90 days before the date you file for bankruptcy. The purchase of luxury goods is considered to be fraudulent, and they cannot be discharged. The debtor could also face allegations of fraud. The definition of luxury goods does not include purchases that were necessary for the debtor’s (or the debtor’s family’s) support or health, such as necessary food, shelter, and utility payments. But more expensive food purchases for the holidays could be considered luxury goods, so you need to think carefully before charging anything on a credit card when you are anticipating a bankruptcy filing.
Similarly, cash advances totaling greater than $1,100 made within 70 days of filing for individual bankruptcy are unlikely to be dischargeable in a bankruptcy case. Accordingly, you cannot get around the luxury goods rule discussed above by taking out cash advances instead.
Potential Consequences of Cash Gifts or a Holiday Bonus
It is also important to consider cash gifts and holiday bonuses if you are planning to file for bankruptcy after the holidays. A cash gift or holiday bonus could have certain consequences for your bankruptcy case. Most imminently, it could place your assets at a high enough amount that you no longer qualify for Chapter 7 bankruptcy. If this is a concern, you should speak with a lawyer soon.
Contact Our West Palm Beach Bankruptcy Lawyers Today
When you have any questions about bankruptcy plans, you should discuss them with an experienced West Palm Beach bankruptcy attorney at Kelley, Fulton, Kaplan & Eller as soon as possible. We are here to assist individuals and businesses alike with a wide range of bankruptcy matters.