Can You Go On Spending Spree before Bankruptcy?

: Reese Baker & Associates

  Filed under: Filing bankruptcy

shopping, attorney, attorneys, lawyer, lawyers, bankruptcy, texas, tx, houston, bryan, college station, katy, woodlands, sugar lands,Bankruptcy proceedings, like many things that are misunderstood, are replete with myths and urban legends that are simply figments of someone’s over active imaginations, yet have gained a strong hold in the folklore surrounding the subject.

One of the most common myths holds that if you are going to go bankrupt you can go on an unlimited spending spree, since you will not have to pay off the debts anyway. This is simply not true. If it is proven that you knowingly incurred additional debts in the anticipation of going bankrupt then that would be considered fraudulent.

The courts have decided that this attempt at subverting the bankruptcy laws by spending away happily is not acceptable and that those debts will not be considered valid and would not be discharged along with the validly accumulated debts that you may have incurred.

In addition to that ruling, you may even face a criminal charge of fraud. The bottom line is that if you are fully aware that seeking bankruptcy protection is your only reasonable alternative. Furthermore, it’s important that you show you have ensured you are spending money on only what is absolutely necessary to live and have avoided any spending that could even be remotely considered unnecessary or frivolous.

The judges and the creditors will take a decidedly unhealthy view of anything that seems to mock the reason that you are there in the first place. Be sure to account for any spending that you are forced to do and be sure that the purchases are things that you absolutely require and not things that you merely want. Once you have decided that bankruptcy is your best form of debt relief, it’s imperative that you to speak to a qualified bankruptcy attorney. Houston has many attorneys that specialize in this form of debt relief, who can give you solid advance on your spending both before and after bankruptcy.