"Is It Wise to Max Out New Credit Cards and File for Bankruptcy?"

Filing for bankruptcy is a significant decision, and it’s essential to understand how it impacts your financial situation. Let’s break down the key points related to credit cards, maxing them out, and bankruptcy:

1. Using Credit Cards Before Filing Bankruptcy:

• Once you’ve decided to file for bankruptcy to manage your debt, avoid incurring new debt. This includes making fresh charges on your existing credit cards or obtaining new loans.

• Debts incurred with the intent to eliminate them through bankruptcy cannot be discharged. The bankruptcy process aims to provide relief for honest but unfortunate debtors, not to allow individuals to cheat banks by maxing out credit cards.

• If you’re stuck in a cycle of making minimum payments on your credit cards while using them for necessities (like food or prescriptions), consider stopping credit card payments. Allocate that money toward essential expenses instead.

1. Charging Necessities Before Filing:

• If you’ve recently used your credit card to buy necessities (like groceries) and plan to file for bankruptcy soon, aim to pay off at least the amount charged before filing. This demonstrates good faith and responsible behavior.

• Keep in mind that bankruptcy courts assume that any debt incurred for luxury items within 90 days before filing was done intentionally to avoid payment.

1. Maxing Out Credit Cards and Bankruptcy:

• Maxing out your credit cards just before filing for bankruptcy could have serious consequences.

• While you can technically max out your cards, doing so may lead to the credit card company objecting to discharging that debt during bankruptcy proceedings.

• Bankruptcy is not an opportunity to spend recklessly; it’s a legal process to address financial hardship.

1. Addressing Creditor Objections:

• If a creditor objects to discharging a specific debt, you’ll have the chance to explain your actions in court.

• Creditors cannot raise objections secretly; there are specific deadlines for doing so.

• Always check the court’s guidelines and deadlines provided in your bankruptcy case documents.

Remember, bankruptcy is a complex legal process, and seeking professional advice from an attorney or a nonprofit organization like Upsolve can help you navigate it effectively