The bankruptcy process is for the needy, but it is not free of course. There is a different kinds of charges or bankruptcy costs that may include a filing fee, administrative fee, an attorney fee, and what not. It might seem extremely unfair to have a charge to file bankruptcy when one is completely broke and doesn’t have any money left. Hence, it is always essential to fill your car with fuel and not wait for the car to dry out without even a drop of fuel. That is the reason why experts suggest planning for bankruptcy when there is just adequate money left to file one. Know more about bankruptcy and planning tips on https://www.recoverylawgroup.com/bankruptcy/.
How is a credit card used to pay bankruptcy fees usually?
A credit card can be used to pay bankruptcy fees in two ways. The first way is a direct method, wherein the card is swiped at the attorney’s office and the payment is made and the second way is to cash out the credit card first and then pay bankruptcy fees or expenses in cash. Use of a credit card to pay for bankruptcy expenses directly as in the first scenario can be considered as a fraud, which is a bankruptcy crime. The consequences for the same are quite bitter as it could lead to some hefty fines as well as jail time.
It is a very common practice amongst the bankruptcy filer to exhaust the credit limit with all possible expenses including bankruptcy fees thinking it is anyway getting a discharge. This is a willful default and if taken up in bankruptcy court can waive off all discharges and could cause previously mentioned consequences as well. Also, most attorneys and the bankruptcy court would not accept credit cards as a payment mode, more so if the credit card is in the name of the bankruptcy filer.
The cash advance scenario
Cash advance and use of the cash to make expenditure is a type of disguise that many bankruptcy filers consider. However, it’s not worth considering. Any luxury purchase of over $725 in the 90 days before filing bankruptcy is assumed by the bankruptcy court as an intent to default and not use the credit card in good faith. Similarly, any cash advances above $1k from the credit card, irrespective of the use, within before 70 days of filing bankruptcy is also considered a preplanned idea of defaulting on a credit card debt under the shield of bankruptcy.
The rules regarding such transactions are extremely strict and it is not easy to get around them as well. This is the reason why having an attorney alongside makes a lot of sense. Dial 888-297-6203 to connect with some of the best attorneys of Los Angeles & Dallas, TX. These silly mistakes can be easily avoided, and severe consequences can be evaded by seeking guidance from the right attorney.