One of the key features in a Chapter 7 Bankruptcy proceeding is the ability to discharge certain debts and provide a meaningful fresh start to an overwhelmed person or family. It is important to understand that not every debt can be discharged in a Chapter 7 bankruptcy. One of the significant exceptions to a discharge order are debts for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s financial condition. It may not seem like it at first glance, but some common purchases or debts can easily fall into this exception and end up not being discharged. If you want your bankruptcy attorney to discharge as much of your debt as possible, then keep reading.

As a bankruptcy attorney in the Houston federal court I see this exception to the discharge rule most often come into play in two more specific subcategories. These are:

1. consumer debts owed to a single creditor and aggregating more than $500 for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable; and
2. cash advances aggregating more than $750 that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be nondischargeable.

Are all debts incurred within 90 days presumed nondischargeable?

No, the key term is “luxury goods or services.” The bankruptcy rules explain “luxury goods or services” does not include goods or services reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor. If your debt is incurred within 90 days of filing but is not for luxury goods or services then your bankruptcy attorney in Houston may help you avoid the presumption of nondischargeability.

What can you expect if you have charges within 90 days or cash advances within 70 days?

It is a growing trend among credit card companies to request the Houston Bankruptcy Court rule these debts nondischargeable in an adversary proceeding. This strategy often works when a person is going through the bankruptcy process alone and does not know how to defend himself or herself from the credit card company, or even worse, ignores the adversary proceeding entirely. Often times in those situations the debt is ruled nondischargeable and it follows the bankruptcy filer even after their other debts are discharged. The presumption is on their side unless your bankruptcy attorney can defeat or rebut the presumption.

A Woodlands Bankruptcy Attorney at your side can help you get the discharge you are entitled to. Don’t just file for bankruptcy, get meaningful debt relief at the end of your case.

LoneStarBankruptcy.com provides the latest news and information on Chapter 7 and Chapter 13 bankruptcy in the Southern District of Texas. The Federal Bankruptcy Court for the Southern District of Texas covers many communities including: Houston, Conroe, The Woodlands, Montgomery County, and Harris County. If you need legal assistance with a personal bankruptcy matter speak with a local bankruptcy attorney today.

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