Before filing a bankruptcy case, it is important that you do not incur any debt. There are specific federal laws that make certain debts incurred prior to filing presumed non-dischargeable. Meaning, under these laws creditors wouldn’t have to do anything to have the debt deemed non-dischargeable in your case.
If you incurred debt prior to filing, reach out to your attorney right away to discuss your best course of action.
While any creditor can object to the debts you incurred prior to filing, the specific laws regarding debt presumed to be non-dischargeable involve cash advances or luxury goods and services.
Any cash advances of $1,100 or more incurred in the 70 days prior to filing, is presumed to be non-dischargeable. Any debts incurred of $800 or more incurred for a luxury good or services in the 90 days prior to filing, are presumed to be non-dischargeable, as well.
For example, say you buy a cruise ticket for $1,000 in the 90 days prior to filing. This debt would be presumed non-dischargeable.
As another example, let’s say you buy groceries in the 90 days prior to filing, you have a big family, so it totals, more than $800. This is a necessity and not a luxury good and would not be presumed non-dischargeable. That being said, even if a debt is a necessity or for a good reason, any creditor still has the right to bring a claim or cause of action to determine debts incurred non-dischargeable. It is best advice to cease incurring any debt when you decide to file bankruptcy.
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