Credit Cards

Credit Cards and the Christmas Holidays

It seems the holidays get bigger every year. More ads, bigger presents, new television specials and more please to get your dollar seem to be every where. While it is human nature to try and show our love through really nice gifts, it should not be via a credit card. And for those people who are considering one last shopping spree right before they file for bankruptcy, heed the advice of a Chicago bankruptcy attorney; leave the credit cards at home.

New Changes in Laws

Recent changes enacted by The Bankruptcy Abuse Prevention and Consumer Protection Act make it tough for people to run up a large balance on their cards and then immediately run to the bankruptcy court for protection. The actual wording states “consumer debts owed to a single creditor and aggregating more than $550 for luxury goods or services incurred by an individual debtor on or within 90 days . . . ; and cash advances aggregating more than $825 . . . or within 70 days before the order for relief under this title, are presumed to be non-dischargeable . . . ” This means that when people try to purchase a significant amount of items on December 21 and then try to file for Chapter 13 relief on January 25, their chances of qualifying will be greatly reduced.

More Common Sense Approaches

Although some people may look at this rule and decide to charge up new debt and wait past the 90 days before getting help from a Chicago bankruptcy lawyer, there is another common sense ruling used by the courts. If a person charged a significant amount of debt over a short time and had no reasonable chance of repaying the debt then the items may be disqualified from bankruptcy. This is usually seen in people who had several credit cards with very low balances and then in the past 6 months maxed out all of their credit cards with no significant change in their income.

It is better to simply cut up the cards and seek out quality counsel before making a choice that could actually worsen your overall financial situation.