There are few restrictions as to when someone can file bankruptcy and in only a few special circumstances would there be objections to a discharge. However, one exception is explained in the bankruptcy code under Section 523(a)(2)(A), which provides that a debtor may not discharge debts incurred as a result of fraud and may not obtain a discharge as a result of fraud. Debtors should discuss with their Acworth bankruptcy lawyer any of the following circumstances:
- Transfer of property – if you have recently transferred property to another family member or any other person for less than the fair market value it is imperative that you mention this when you discuss filing bankruptcy.
- Credit expenditures – any credit cards that were opened six months or less before filing bankruptcy should be mentioned. This is especially true of there were either very large purchases or cash withdrawals made on that credit card.
- Significant cash changes – debtors who took out loans against their retirement accounts and cannot account for where the cash went may be suspected of fraud.
Understanding the look-back period
Generally speaking when you meet with a bankruptcy attorney in Acworth, you are going to be asked to present a list of all credit card debts, other debts and all assets. It is important that this list be comprehensive for a number of reasons including ensuring the courts have a comprehensive picture of your financial status. In general, your attorney may discuss with you any material changes during the last three months to see if there are any warning signs that could potentially cause you problems.
The bankruptcy trustee will not look back this far; in general they will look back 30 days to see what new purchases have been made and 90 days for all transfers; however your Chapter 7 attorney may ask you for additional information to ensure they are aware of these in advance.
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How to avoid the fraud exception
First and foremost, all debtors should make sure that the information they provide to their bankruptcy attorney is accurate. Any debts that are not listed on your schedule will not be discharged in the bankruptcy filing and any assets that are not listed could mean that your creditors will fight your bankruptcy discharge.
Debtors who have received a significant amount of cash during the three months preceding their bankruptcy filing should disclose this information to their attorney and be prepared to explain how those funds were used. In addition, any new credit applications that were made during this period and granted will be looked at carefully to ensure you did not make any misrepresentations to the creditor.
Debts that may be excluded
It is important to remember that there are debts that may not be discharged in bankruptcy but you should still notify your Acworth bankruptcy lawyer about these debts since they will have an impact on your repayment for Chapter 13 and may help with the means testing for Chapter 7 bankruptcy. Some non-dischargeable debts include:
- Criminal restitution
- Child and spousal support
- With few exceptions, tax obligations
- Student loans
If you have any questions about whether the debts you have incurred or cash you may have spent prior to filing bankruptcy may cause you problems it is important to discuss your concerns with your bankruptcy attorney. If you are consider filing bankruptcy and are uncertain whether Chapter 7 or Chapter 13 is best for your needs, contact Roger Ghai, a bankruptcy attorney in Acworth at the Law Offices of Roger Ghai at (770) 792-1000.
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