Credit cards in bankruptcy are usually discharged, meaning the borrower is relieved of all personal liability on the account. The discharge is a permanent court order releasing the debtor (borrower) from personal responsibility for the debt. Further, the discharge prohibits a credit card company from taking any collection action against the borrower. Credit cards in bankruptcy are almost always unsecured debts. Unsecured debts are loans in which the debtor does not provide any collateral for the loan. In Chapter 7 bankruptcy, unsecured debts are generally eligible for discharge. However, there are circumstances which can prevent a discharge of credit cards in bankruptcy. Therefore, you should consult with a Tampa bankruptcy lawyer before filing bankruptcy.
Credit Cards in Bankruptcy with Allegations of Fraud
If a lender successfully proves credit card fraud against a debtor, the credit card debt may not be discharged. This process would start with the creditor challenging the discharge because that creditor believed the debt was incurred through fraud. See Bankruptcy Code section 523(a)(2)(A). Fraud is a defense against dischargability for credit cards in bankruptcy. For credit card fraud, the creditor will need to prove one of two things: (1) that the card was obtained through fraud, such as falsified information on an application; or (2) the use of the card itself was done in a fraudulent manner. If you think a lender may have a claim of fraud for credit cards in bankruptcy, contact a bankruptcy lawyer in Tampa for legal advice right away.
Adversary Proceedings for Credit Cards in Bankruptcy
If a lender accuses you of fraud for credit cards in bankruptcy they will need to file a notice of adversary proceedings. This step is mandatory if a credit card company wants to challenge the dischargability of credit cards in bankruptcy based on fraud. There are very specific time-frames involved for a credit card company to file this notice. If the claim is not timely filed, the creditor may be barred from challenging the discharge of credit cards in bankruptcy. For more information on the time requirements contact a Tampa bankruptcy lawyer for assistance.
The court looks at a number of factors when deciding whether or not there is fraud for the credit cards in bankruptcy. The bankruptcy judge will look at the following factors, but it is important to remember that not one single factor is outcome dispositive. The judge will look at all of the facts relevant to these factors before making a decision.
The court will evaluate: (1.) the length of time between the charges and the bankruptcy filing; (2.) whether or not an attorney had been consulted concerning the filing of bankruptcy before the charges were made; (3.)the number of charges made; (4.) the amount of the charges; (5.) the financial condition of the debtor at the time the charges were made; (6.) whether the charges were above the credit limit of the account; (7.) whether the debtor made multiple charges on the same day; (8.) whether or not the debtor was employed; (9.) the debtor’s prospects, (10.) whether there was a sudden change in the debtor’s buying habits; and (11.) whether the purchases made were luxuries or necessities. See In re Dougherty.
Bankruptcy Law Firm in Tampa
At Florida Law Advisers, we understand credit cards in bankruptcy can be a very confusing and intimidating process. That is why we work so hard to make the process as easy as possible for our clients. When you hire Florida Law Advisers, P.A., you get an experienced bankruptcy lawyer in Tampa by your side throughout every phase of the bankruptcy process. We will help ensure your rights are protected, keep you well-informed every step of the way, and help you receive the utmost protection bankruptcy can offer. Regardless, if you need help with Chapter 13, Chapter 7, or other debt relief our professional legal team will provide you with competent legal advice you can trust. To schedule a free consultation with a bankruptcy attorney in Tampa, call, email, or fill out an online inquiry on our website today.