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Making New Purchases on Credit Before Bankruptcy

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  • 12-02-2016, 07:03 PM
    lawfacts
    Making New Purchases on Credit Before Bankruptcy
    A creditor received a notice of bankruptcy from a customer who was actively making purchases on credit less than sixty days before his bankruptcy, and added a significant amount of debt to his account over the preceding six months. Does a bankruptcy court permit a creditor to try to recover payment for charges that are incurred during the period leading up to a bankruptcy? Can the creditor find out when the debtor hired his bankruptcy lawyer, to see if this was part of a plan?
  • 12-03-2016, 06:57 AM
    Mr. Knowitall
    Re: Making New Purchases on Credit Before Bankruptcy
    There are legal protections in effect for creditors, in relation to debts incurred by a debtor in contemplation of bankruptcy. There is a presumption in favor of the creditor for new charges made within a ninety day period prior to filing. The creditor may make a challenge beyond the ninety day period, but does not benefit from the presumption.

    The fee disclosures in the bankruptcy filing may give an idea of when the bankruptcy lawyer was retained. It may be possible to get more information when opposing discharge.
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