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How Does Bankruptcy Affect a Cell Phone Contract

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  • 07-27-2014, 08:30 PM
    gonzodude
    How Does Bankruptcy Affect a Cell Phone Contract
    My question involves bankruptcy in the state of: CA

    I am wondering how it would affect my chapter 7 if I were to sign up for a 24 month smartphone contract before filing? Or after filing but before discharge? Would this be considered a luxury purchase if I use a credit card? (Or is it luxury if I use cash?)

    I know I shouldn't be spending money I don't have, but I have not had a decent phone in years. I am thinking that after my debts are discharged it may be difficult to get approved for a contract, and might get stuck with a "pay as you go" plan which are not typically the best.
  • 07-27-2014, 08:35 PM
    gonzodude
    Re: Getting New Cell Phone
    I was thinking about getting the "free" Galaxy s4 through Verizon phone with a 24 month contract. But the contract is going to cost approx $100/mo
  • 07-27-2014, 08:42 PM
    Dogmatique
    Re: Getting New Cell Phone
    You haven't had a decent phone in years?

    Oh, you poor thing.
  • 07-27-2014, 08:48 PM
    gonzodude
    Re: Getting New Cell Phone
    you don't understand ... my phone is terrible :wallbang: LOL

    - - - Updated - - -

    You think this is a bad idea? I really hate my phone! LOL (if you had the same one for the last 6 years, you'd know where I'm coming from)

    But, seriously, won't it just be looked at as just another utility or expense? (like the electric or gas bill) I mean everyone has to have a phone these days, right? (I don't have a land line, BTW, just one cell)

    Please, no "Obamaphone" jokes ... :D
  • 07-27-2014, 09:32 PM
    CourtClerk
    Re: Getting New Cell Phone
    Actually, my sister in law's phone is so old, she's STILL using a flip phone. Granted, she pays her bills.
  • 07-27-2014, 09:41 PM
    gonzodude
    Re: Getting New Cell Phone
    LOL "flip phone" ... that's exactly what I have! ;)

    Anyways, I was wondering, though, if it wouldn't just be considered a "utility" expense? I don't have any other phones, so it would be my only one. But, not sure how BK court/trustee would look at it since it would new a new contract. Aslo, I'm just guessing that after the discharge of debt, I would probably be turned down for a 24 month contract, so getting one BEFORE might be advantageous?

    Thoughts?.
  • 07-27-2014, 09:52 PM
    Mr. Knowitall
    Re: How Does Bankruptcy Affect a Cell Phone Contract
    Quote:

    Quoting gonzodude
    View Post
    I am wondering how it would affect my chapter 7 if I were to sign up for a 24 month smartphone contract before filing?

    You can declare your current obligation on your account during bankruptcy, although I suspect that your carrier will cut off service if you do so. If you keep the phone, you'll have to continue to pay your bills after you file bankruptcy. If you're just going to return the phone and have the early cancellation fee discharged, I'm not sure that I see the point.
  • 07-27-2014, 09:59 PM
    Dogmatique
    Re: Getting New Cell Phone
    Personal feelings I may or may not have aside (someone grab Jimmy for me and him know), the bankruptcy code does not prevent you from buying a phone.

    Unless (hypothetically) you (hypothetically) have a simple no-asset Ch 7, you'd be better off having a sit-down with an attorney. If - and this is a HUGE "if" - you can commit yourself to reading up (bkforum.com, is a great site) and educating yourself, you may be able to do it all yourself (with a copy of NOLO's Ch7 book perhaps)

    I was able to successfully discharge (in a no-asset Ch 7) old tax debts, and we have the "release of federal tax lien or whatever it says" document in a nice frame.

    It can be done.
  • 07-27-2014, 10:22 PM
    gonzodude
    Re: Getting New Cell Phone
    Quote:

    Quoting Dogmatique
    View Post
    Personal feelings I may or may not have aside (someone grab Jimmy for me and him know), the bankruptcy code does not prevent you from buying a phone.

    Unless (hypothetically) you (hypothetically) have a simple no-asset Ch 7, you'd be better off having a sit-down with an attorney. If - and this is a HUGE "if" - you can commit yourself to reading up (bkforum.com, is a great site) and educating yourself, you may be able to do it all yourself (with a copy of NOLO's Ch7 book perhaps)

    I was able to successfully discharge (in a no-asset Ch 7) old tax debts, and we have the "release of federal tax lien or whatever it says" document in a nice frame.

    It can be done.

    As a matter of fact, I do pretty much have a simple no-asset chapter 7, with a few minor twists that I am posting about. I actually have that particular book and have read a great portion of it, skimmed most of the rest. Thanks for the bkforum link. I will definitely check it out.

    I am still kind of leaning towards an attorney, just because I don't like the idea of possibly doing something wrong and then paying dearly for it later in years to come. But I am still in the process of trying to decide whether I really need to get a lawyer or not. At this point, I don't think I need one, with the help of the book.

    - - - Updated - - -

    Quote:

    Quoting Mr. Knowitall
    View Post
    You can declare your current obligation on your account during bankruptcy, although I suspect that your carrier will cut off service if you do so. If you keep the phone, you'll have to continue to pay your bills after you file bankruptcy. If you're just going to return the phone and have the early cancellation fee discharged, I'm not sure that I see the point.

    Maybe I could ask the carrier what they do in certain circumstances?
  • 07-27-2014, 10:28 PM
    Dogmatique
    Re: Getting New Cell Phone
    I think getting an attorney to review your information is an absolutely stellar idea!

    (the "tear off" forms in the back of the book are awesome to help you fill out the actual forms :) )
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