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Luxury Item Limits Within 90 Days of Filing a Bankruptcy Petition

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  • 10-19-2014, 03:13 PM
    gonzodude
    Luxury Item Limits Within 90 Days of Filing a Bankruptcy Petition
    My question involves bankruptcy in the state of: CA

    From my understanding, I can still use my credit cards for ANY luxury item within 90 of filing the petition, as long I do not exceed $650 of luxury items per creditor during the 90 period before filing.
    Is this true?
    Or, is it $650 total for all the credit cards combined? (BTW, all my debt is from unsecured credit cards)

    What happens if I exceed those amounts?
    Is the amount I go over (in each case) exempt from discharge?
    Or, does it make the WHOLE debt from that creditor exempt from discharge? (ie - $10,000 of current balance incurred from purchases made 2 years ago)

    But, as long as I agree to pay back the amounts of the overage of each instance, it won't affect the rest of my discharge for my total debt owed to ALL creditors.
    Is this right?

    Also, what if I have 2 Citi cards, and 2 Chase cards? (separate accounts, but both under my name and SSN)
    Are they both considered the same creditor, or is each card a different creditor?


    If someone could clarify this, it would be great. Thanks.
  • 10-19-2014, 03:28 PM
    flyingron
    Re: Luxury Item Limits Within 90 Days of Filing Petition
    No, if you spend less than $650 (per creditor...i.e. card issuer) total in the last 90 days, then you can probably discharge the debt in the bankruptcy.
    If you spend more than $650 TOTAL in the last 90 days on "luxury" items. You can't discharge ANY of it.
  • 10-19-2014, 03:36 PM
    gonzodude
    Re: Luxury Item Limits Within 90 Days of Filing Petition
    Quote:

    Quoting flyingron
    View Post
    No, if you spend less than $650 (per creditor...i.e. card issuer) total in the last 90 days, then you can probably discharge the debt in the bankruptcy.
    If you spend more than $650 TOTAL in the last 90 days on "luxury" items. You can't discharge ANY of it.

    So, that is $650 per card issuer. Anything over the $650, per card issuer, is not able to be discharged. Is that what you are saying?

    I am just afraid to cause the whole entire debt of all my cards combined to be not discharged just because I went over the $650 limit by a few hundred dollars on one, or maybe two of my credit cards. Or, to cause one or two of my cards (the ones I went over the $650 luxury item limit on) to not be discharged. This would be disasterous b/c they have a balance of $10,000 each from charges I made a couple years ago.
  • 10-19-2014, 03:46 PM
    flyingron
    Re: Luxury Item Limits Within 90 Days of Filing Petition
    Quote:

    Quoting gonzodude
    View Post
    So, that is $650 per card issuer. Anything over the $650, per card issuer, is not able to be discharged. Is that what you are saying?

    What I am saying is that if you spend less than $650 with any one creditor (even if you have multiple cards with the same issuer like, let's say three Capital one cards, they all get added together), then they don't worry if it's a luxury purchase or not. If you have more than that, then they start to look at what it is for. The entire luxury purchase (not just the stuff over $650) is NON-DISCHARGEABLE.

    Quote:

    I am just afraid to cause the whole entire debt of all my cards combined to be not discharged just because I went over the $650 limit by a few hundred dollars on one, or maybe two of my credit cards. Or, to cause one or two of my cards (the ones I went over the $650 luxury item limit on) to not be discharged. This would be disasterous b/c they have a balance of $10,000 each from charges I made a couple years ago.
    Anything from prior to 90 days isn't considered, it's still dischargable. Only the luxury items in the last 90 days are excluded form discharge.
    All they're trying to do is keep you from running up the cards right before you file.
  • 10-19-2014, 03:53 PM
    gonzodude
    Re: Luxury Item Limits Within 90 Days of Filing Petition
    Ok, I think we're on the same page now. So, I have to pay ALL of the luxury items back no matter what; they can't be discharged. But, if I go over the $650 limit per creditor, then it looks like fraud to the court, in which they may reject the whole case, for which I would have to wait 6 months to file again. Am I right?


    Also, are you sure "per creditor" or "per card"? I have 5 cards: Discover (1), Chase (2), Citi (2). All of my cards are issued to me and only me.

    If per creditor, then I get $650 w/ Discover, and $650 for Chase, and $650 for Citi, even though I have 2 cards with each. Total of $1,950 ($650 x 3)
    If per card, it's $650 x 5, or $3,250 total.

    Also, "non-luxury" items are still discharged even if incurred during the 90 day period prior to filing. (ie - food, groceries, etc...) Correct?
  • 10-21-2014, 06:19 PM
    gonzodude
    Luxury Item Limits Within 90 Days of Filing a Bankruptcy Petition
    My questions involve bankruptcy in the state of: CA

    I asked this in a follow up to one of my previous posts on another thread, but didn't get an answer. So, I'll make a separate thread about this one question I have.

    Note: This is in regards to luxury item purchases on credit cards in 90 day period prior to filing a chap 7 petition.

    First Question:
    Is this rule "per creditor" or "per card"?

    I have 5 cards: Discover (1), Chase (2), Citi (2). All of my cards are issued to me and only me.

    If per creditor, then I get $650 w/ Discover, and $650 for Chase, and $650 for Citi, even though I have 2 cards with each. Total of $1,950 ($650 x 3)
    If per card, it's $650 x 5, or $3,250 total.

    Second Question:
    Also, "non-luxury" items are still discharged even if incurred during the 90 day period prior to filing. (ie - food, groceries, etc...) Correct?

    Third Question:
    Are ALL purchases added up, and do they all apply towards the $650, or just the luxury item purchases are counted and the non-luxury ones don't count?
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