When does a debtor have to stop using their credit cards if they are planning on filing for bankruptcy?
As soon as you anticipate filing bankruptcy, you must stop using your credit cards. Bankruptcy law allows the review of questionable purchases for potential fraud. If a purchase is made 40 days prior to filing or cash advances taken within 20 days of filing, the debt may possibly be excluded from the bankruptcy. I always advised my clients to wait at least 90 days before filing for bankruptcy if they have used credit cards recently. There are law firms that specialize in filing adversary complaints for credit card companies. They try to shake the debtor down, and make they reaffirm or pay off part of the debt. Their main purpose is to convince the debtor that it would be easier to reaffirm and pay back part of the debt, then to pay their bankruptcy lawyer to litigate in Federal Court. Litigation in Federal Court can be expensive and time consuming. Therefore, it is always advisable to wait at least 90 days before filing if recent credit card transactions are an issue.
