Bankruptcy Fraud?

[mperry60]

What is the name of your state? New York

Hello,
I have had an initial consultation with an attorney and am most likely going to file for bankruptcy. This is a decision I have only just made this week.

My question concerns the definition of fraud in bankruptcy. I have rung up about $30,000 in unsecured debt but do not have alot to show for it. One major purchase was a professional level drumset (about $5000) that I bought last Feb. but had to sell off this past August because I needed the cash desperatley to pay off debts and to have a little cash left over to live on. Would this purchase and/or sale raise any red flags with a trustee?

Also, about 2 months ago I purchased a Bowflex excercise machine for our home. This we still have, but I'm wondering if someone would consider this to be fraudulent or an abuse of credit since my debt to income ratio is so bad.

I have taken out several small cash advances over the past several months ($20, $40, maybe a couple for $100) to live off of. Are these suspect?

Like I said, I had no intention of filing before this week when I realized I've just been robbing Peter to pay Paul and came to the conclusion that I'm in over my head making minimum monthly payments and not seeing much difference in the balance of my high interest credit cards.

Anyone care to voice an opinion?

Thanks.

 

[SleeplessInMI]

Any activity within a 90 day period before filing will draw more attention and red flags. I don't think you would be considered a BK fraud but you might get looked at more than someone that hasn't used any credit in the past year or so. But then again, with the new laws, everyone is going to be getting looked at more now.

 

[mperry60]

So then, let me ask this--If a trustee deems certain credit card purchases as luxury (i.e. the Bowflex, drumset, c.d.'s, etc.) will he dismiss my bankruptcy? Or will he move it from Chapter 7 to Chapter 13?

Thanks for the reply.

 

[SleeplessInMI]

Don't know... only the Trustee knows for sure what he will do. With the new law you basicly have to be po' (one step below poor) to get a chapter 7 anyways. Best to consult with a BK attorney for the best answers.

 

[Who's Liable?]

There are a lot of stipulations in the new laws... How much do you make a year? If your are over your states median inclome, you will be forced into a BK13, plus you will need to go through Credit Counseling, that YOU will have to pay for...

Just curious... How were you able to pay for a bowflex, but at the same time are having problems making payments to your creditors? It's a questions that WILL come up... The rule of thumb is NO large purchases 6 months prior to filing BK...

 

[mperry60]

There are a lot of stipulations in the new laws... How much do you make a year? If your are over your states median inclome, you will be forced into a BK13, plus you will need to go through Credit Counseling, that YOU will have to pay for...

Just curious... How were you able to pay for a bowflex, but at the same time are having problems making payments to your creditors? It's a questions that WILL come up... The rule of thumb is NO large purchases 6 months prior to filing BK...

I make about $27-28,000/yr. I've already done the counseling.

Well, I didn't really pay for the Bowflex. It was charged on a card to help with my wife's leg therapy (broken leg).

I just got in over my head thinking I could keep making the payments. It was stupid of me but I did it and here I am.

What is considered a large purchase? Over $500, over$1000?

Could my bankruptcy be dismissed because of this?

 

[SleeplessInMI]

Instead of playing 20 questions why don't you consult with an attorney and get the answers answered correctly?

 

[mperry60]

I understand that. But isn't this a site for questions and answers???

 

[bigun]

making bad decisions and fraud are 2 different things.
I don't see anything you've done rising to substantial abuse.
Just lay out everything to your attorney. List the Bowflex on your schedules and if it's something that can't be exempted the trustee will take it-though I've no idea what you'd get for a used piece of execrise equipment.

 

[mperry60]

making bad decisions and fraud are 2 different things.
I don't see anything you've done rising to substantial abuse.
Just lay out everything to your attorney. List the Bowflex on your schedules and if it's something that can't be exempted the trustee will take it-though I've no idea what you'd get for a used piece of execrise equipment.

Thanks for the reply. It's appreciated. I have an appointment with my attorney tommorow.