Stop Charging Credit Cards

A common question I am asked by new clients is, “when should you stop charging credit cards before bankruptcy?”  Most people intuitively know the answer to this question because their gut feeling tells them that it is morally wrong to charge up cards before filing, especially when they don't intend to pay for the charges.  The best advice an attorney can give you is that once you know you are going to file on your cards, you should immediately stop charging your credit cards.  The issue becomes complicated when you have already made recent charges, without first consulting with an attorney, and now you need to file bankruptcy immediately.

When Should You Stop Charging Credit Cards Before Bankruptcy?

If you know you are filing bankruptcy, that means you know you are not going to pay your credit card debt.  If you want to file bankruptcy to obtain debt relief, you have to act honestly with respect to creditors.  If you keep making charges on credit cards, knowing you don’t plan on paying the charges, that is not honest and is a type of fraud under Federal and California law.  It can even be a crime.  Legally speaking, “fraud” can occur when you make a promise without the intention to perform it.  You are making charges on your card, promising to repay the charges, but in fact you have no intention to repay the charges because you’ve already decided to file.  The law defines such a false promise as a type of fraud and engaging in such acts will prevent you from obtaining debt relief San Diego when you file for bankruptcy San Diego.


If you have already made charges on your credit cards in the past month or two, and you now need to file, you must be careful to avoid any implications of fraud.  How long should you wait between the time that you stop making charges on credit cards, and the time that you file bankruptcy?  Each person’s situation will be different and how soon you can file, or what the ramifications of a filing might be, will depend on several factors.  Factors include: the amount that you charged, when you made the charges on your credit card, how much time has passed since you made charges your cards, and how many payments you have made and the amounts of the payments.  You must sit down with an attorney and only after a review of the totality of the circumstances can an attorney properly advise you as to when you can file and what will happen to your credit card debt in your San Diego bankruptcy filing.


So if you’ve been wondering when you should stop charging your credit cards before bankruptcy, stop charging your credit cards immediately.  The simple fact that you are thinking about the issue means you are possibly contemplating bankruptcy and therefore you should not make any more charges.   Then, immediately contact a San Diego bankruptcy attorney and discuss your situation, including the totality of the circumstances, to determine your best course of action.  By stopping charges on all credit card immediately, you will maximize your chances to achieve your goal to eliminate credit card debt in your filing.