If you’re planning to file bankruptcy and specifically Chapter 7 in Michigan, it’s important to know when to stop using credit cards before filing.
In Michigan, you should stop using credit cards at least 90 days before filing Chapter 7 bankruptcy to avoid allegations of fraud. Using credit cards for luxury purchases or cash advances shortly before filing may result in those debts being excluded from discharge or complicating your case.
As a bankruptcy lawyer for decades, I’ve helped countless clients successfully get out of debt with Chapter 7 Bankruptcy. In this article we’ll explore everything you need to know about when to stop using credit cards before filing Chapter 7 in Michigan.
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Frequently Asked Questions
When should I stop using credit cards before filing for Chapter 7 bankruptcy?
It is advisable to stop using credit cards at least three months prior to filing for Chapter 7 bankruptcy to prevent complications and potential objections from creditors. This prudent step helps ensure a smoother bankruptcy process.
Can new debts incurred before bankruptcy be discharged?
New debts incurred before bankruptcy, particularly those for luxury goods or cash advances, are generally non-dischargeable, and most tax debts will remain your responsibility.
What is the role of the bankruptcy trustee?
The bankruptcy trustee plays a crucial role in administering the bankruptcy process, overseeing financial activities, and safeguarding against fraudulent actions. This ensures a fair and legal resolution for all parties involved.
What alternatives are there to using credit cards before filing for bankruptcy?
Before filing for bankruptcy, consider alternatives such as creating a budget, cutting non-essential expenses, seeking financial help from family or community programs, and negotiating payment plans with creditors. These steps can provide immediate financial relief and help avoid bankruptcy.
What happens after I file for Chapter 7 bankruptcy?
After filing for Chapter 7 bankruptcy, an automatic stay halts most collection activities, and you will need to attend a Meeting of Creditors where your financial situation will be assessed.
