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It’s Better to File Your Bankruptcy Before the Holidays

Christmas, Hanukkah, Kwanza, Holidays, Bankruptcy
Jacksonville bankruptcy filings are always down from November through February and the reason is obvious: the holidays are upon us and no one wants to file bankruptcy during the holidays.

The problem with the delay is that despite the fact that people are in debt, they are still obliged to buy gifts. 11 U.S.C. § 523 lists various, “Exceptions to Discharge” which include under (c)(i)(I) any, “luxury goods or services incurred… …within 90 days]” of the day of filing over $500 in value and any “cash advances aggregating more than $750… ….within 70 days of filing. There is an exception for goods and services that are reasonably necessary for the support or maintenance of the debtor or debtor’s dependents. Presents, even though traditional, are likely to be considered a luxury unless especially modest. These purchases just prior to filing would be non-dischargable in the bankruptcy causing debtors to enter life after the bankruptcy already in debt again.

Purchases made without the intent to repay the debt are fraud under 11 U.S.C. § 727(a)(2) which can lead to a denial of discharge (bankruptcy case closed and debts still owed), or even jail time.

Filing before the holidays makes more sense because Chapter 7 property of the estate is determined on the date of filing. Purchases made with post-filing funds would not be fraudulent and would allow the debtor to enter the New Year without having to worry about the dischargability or criminal liability of new holiday debt.

If you’d like to prepare your bankruptcy before the holidays, contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

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