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if i pay my med ins or bill by CC and later am forced to BK is that a problem?


iZ
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The rule of thumb is that anything on a credit card that is charged within 60 - 90 days of filing is suspect. However, when fought, most banks step back because they have to prove that the item was a luxury item or that you intended to commit fraud by charging to a CC when you were comptemplating BK.

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The $ amount does not determine if something is a luxury item or not. If you happen to buy a $1000 car to get to and from work because the other one died with your credit card, the bank would have a hard time proving that the purchase was a luxury. I would think that the same goes for health insurance.

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You are fine. You could charge your credit card for a $15,000 health insurance policy two weeks before filing a Chapter 7 and it isn't a big deal. It isn't a luxury item and it isn't a cash advance, so the presumption of nondischargeability doesn't apply.

The creditor would have to object based on fraud, which likely isn't present. And it'll cost them more than a $1000 to hire an attorney to do this, so it ain't worth trying.

So if you have to, then use the credit card. By law it is illegal for me to advise you to juice your card in contemplation of bankruptcy, but if for some reason you were to end up filing, it shouldn't be an issue. :)

-----------------------------------------------

C)

(i) for purposes of subparagraph (A)--

(I) consumer debts owed to a single creditor and aggregating more than $500 [ $550] for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable; and

(II) cash advances aggregating more than $750 [ $825] that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be nondischargeable; and

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Sorry to bother you again, but I cant tell if this guy is trying to scare me or he is telling the truth....here is the conversation. I am really trying to get a clear answer. thx!

can i pay my health insurance or med bills with a cc w/o it being a lux Exp if am forced to file BK later?

credit is perfect but cash flow is really bad and i am afraid to lose my health insurance with all my medical bills.

thanks so much for your wisdom,

Health insurance and medical are necessary expenses, just keep it under 1k per transation.

ill is $1060 for my insurance...and i cant pay only part of it. on the insurance site? will this still be considered a luxury item? now i dont know what to do... thanks by the way

How long is this $1060 good for, a month of coverage or longer?

What are you going to do when the next bill comes due?

Have you stopped paying your dischargeable debts? If you didn't pay the cards, would you be able to make the insurance payment?

It sounds like you've reached the point where you realize a bankruptcy is inevitable. Further charges from this point are under fraudulent pretenses. Whether or not the charge meets the criteria for an automatic presumption of insolvency or is beyond the automatic presumption period and requires the creditor to have the burden of proof doesn't really matter.

The charge is still wrong and you should not make it if you have any other possible option. Try to find another way, since this is likely the last time a credit card will be available to bail you out of this bad situation.

If you do end up making the charge, put as much time as possible between the charge and your filing. You need to get beyond the automatic presumption period so they weigh the possibility of collecting against legal costs. At absolute bare minimum you need three months -- are you going to need the protection of the automatic stay prior to November?

I have not reached a point of any decisions, I am looking at options with no decision made and trying to research about about what is smart as well as legal. I appreciate smart legal accurate information.

for instance I don't understand the difference of the the over 1000 dollars, if i used it for medical bills or ins,is it a luxery expense or not?

this is best info i can find. but i find it confusing as an answer to my original question (see below)

thank you for your valuable time and accurate information in a confusing example.

if ( showRev ) { document.write("

© for purposes of subparagraph (A) of this paragraph, consumer debts owed to a single creditor and aggregating more than $1,000 for "luxury goods or services" incurred by an individual debtor on or within 60 days before the order for relief under this title, or cash advances aggregating more than $1,000 that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 60 days before the order for relief under this title, are presumed to be nondischargeable; "luxury goods or services" do not include goods or services reasonably acquired for the support or maintenance of the debtor or a dependent of the debtor; an extension of consumer credit under an open end credit plan is to be defined for purposes of this subparagraph as it is defined in the Consumer Credit Protection Act;

") }

©

(i) for purposes of subparagraph (A)--

(I) consumer debts owed to a single creditor and aggregating more than $500 for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable; and

(II) cash advances aggregating more than $750 [document.write("$"+adj523a2Cii$)$825] that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be nondischargeable; and

(ii) for purposes of this subparagraph--

(I) the terms "consumer", "credit", and "open end credit plan" have the same meanings as in section 103 of the Truth in Lending Act; and

(II) the term "luxury goods or services" does not include goods or services reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor.

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Not sure who you mean by "this guy", but I'd go by what jq26 is saying. If you need to pay your medical bills or insurance with a CC...do it. If you do decide to file BK later, you will almost certainly NOT have a problem. If it a BK 7, the debt go away...if its a BK 13, you'll be paying part of it back anyway.

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You are really overthinking this. First off, no creditor will file an adverse hearing for less than $5000. If the do, the judge will literally laugh at them because it will cost them $5000 in fees and attorney costs just to do the adverse hearing. This statement is from a BK court clerk in Minnesota who happens to be my cousin. I therefore would not worry unless you plan on charging up $5000 within 90 days of filing.

You did ask yourself an interesting question however, how do you plan on paying the health insurance premium next month (or after you finally file for BK)? BK only deals with the debt. It does not solve an income problem. I would suggest worrying more about income than something being charged considered fraud or luxury.

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thank you so much, i probably am over thinking it, But I am new at this and when the i get conflicting info I don't know what is true.

when he said:

_________________________________________________________________________

"It sounds like you've reached the point where you realize a bankruptcy is inevitable. Further charges from this point are under fraudulent pretenses. Whether or not the charge meets the criteria for an automatic presumption of insolvency or is beyond the automatic presumption period and requires the creditor to have the burden of proof doesn't really matter.

The charge is still wrong and you should not make it if you have any other possible option. Try to find another way, since this is likely the last time a credit card will be available to bail you out of this bad situation."

______________________________________________________________________

it was in contradiction to what i had been told until then and threw me into confusion..

you can only make the best decisions based on the quality of information.

I am just trying to learn what is true and to make smart decisions if it becomes necessary.

I thank you for the clarification and your experience and valuable time,

iZ

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