Bankruptcy Attorneys Stockton, CA

Certain transactions should not be made within 90 days of filing your bankruptcy petition. Under Section 523 of the bankruptcy code, if a debtor spends over $500 on credit card for luxury services or goods, that debt will be presumed to be nondischargeable. Certain cash advances of $750 or more, made within 70 days of the bankruptcy filing will also be presumed to be nondischargeable. This doesn't mean that the debtor won't be able to file the bankruptcy and obtain a discharge. It only provides a presumption that a particular debt won't be discharged. If the transaction was made via cash or ATM, then the bankruptcy courts usually won't care. These problems arise when creditor's monies are used such as credit cards, cash advances, etc.

Stockton Bankruptcy Lawyer, San Joaquin County, California

If a creditor is able to provide proof that one of the above transactions were made, then they will have met their prima facie burden. However, a debtor can rebut this presumption by providing evidence of his intent to repay. The best way to do this is to show the debtor made payments back to the creditor after the fraudulent transaction. For example, let's say the debtor bought a diamond ring on a credit card 75 days ago and she made 2 payments of $300 before filing her bankruptcy petition. The payments made to the creditor will help rebut the presumption that the debtor bought the diamond ring with the intent of discharging the debt. This doesn't mean the debtor will win the case, but it will certainly help. Also, any payments made to any other creditors will help as well. So, if the debtor in our example also made payments to her other credit cards, that goes to show she didn't intend to defraud any of them.