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If you file bankruptcy, be wary of your spending

On Behalf of | Feb 2, 2022 | Bankruptcy

It’s very important to take bankruptcy seriously and to understand exactly how to make your case as strong as you possibly can. Some people are of the opinion that they should just spend money, once they know they’re going to file, since all of their debts are going to be erased. But doing this can be problematic.

For instance, if you start excessively spending on credit cards or other lines of credit, knowing that you’re going to file bankruptcy and you’re never going to pay that back, it can be viewed as bankruptcy fraud. In the best case, the items that you bought are likely going to be sold or liquidated anyway. If you bought things that are nonrefundable – such as going on vacation – then you could be accused of fraud.

So can you spend anything at all?

The above should not make you nervous to spend anything, as the bankruptcy process can take months to be completed. It is only realistic that you’re going to have some bills during that time and you’re going to need to use credit cards and things of this nature to pay them off. There’s nothing wrong with continuing to spend in the way that you normally do, even if some of that debt is eventually going to get wiped out.

What you need to be wary of is simply taking things to the extreme or doing anything that risks getting your case tossed out of court. This is why it’s so important to understand all of the proper legal steps to take whenever you declare bankruptcy