Once they get so far in debt that filing for bankruptcy seems like a foregone conclusion, some folks figure that they might as well max out their remaining credit cards before filing their bankruptcy petition. While in theory that might sound like a good plan, in practice it could get you into trouble or wind up tanking your debt discharge.
Does that mean that you should cut up whatever credit cards that remain? What happens if you need those funds to live on now?
What’s a debtor to do?
First, relax. If you have decided to file for bankruptcy to eliminate your debt, you have taken the first step in resolving your personal financial crisis. While it might not be appropriate to congratulate yourself on filing for bankruptcy, at least you have a plan in place to correct your fiscal course.
Regarding the use of your credit cards in the weeks and months before your actual filing date, there are no laws that prevent you from using your cards for day-to-day necessities. That means that if you need to fill your gas tank to get to and from work or to take the kids to school and their various extracurricular activities, go ahead.
What about other purchases?
The courts crack down on debtors whom they perceive as gaming the system by running up their credit cards on luxury purchases just prior to seeking a discharge of their accrued debts. So, forget about ordering that Peloton bike or cruising along the Amalfi coast. Not only can that get you in trouble with the trustee who is overseeing your case but you could also wind up not getting the clean slate you anticipated.
Learn more to be proactive
If you are looking into filing for bankruptcy in Massachusetts, learn all you can about the rights and responsibilities associated with filing your petition.