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It is no secret that almost half of all consumer spending occurs during this time of the year.  However, for one contemplating bankruptcy, careful spending and planning are essential.  Section 523(a)(2) of the United States Bankruptcy Code addresses the problem of credit card overspending prior to a bankruptcy filing.  This section exempts from a Chapter 7 Bankruptcy Discharge “debt that was obtained if an individual made material and false representations about his financial condition.”  This means that a person either submitted false information on the credit card application or knowingly made false purchases or made purchases on credit that were unaffordable to repay.  The latter is a more common scenario and the credit card companies may use Section 523(a)(2) to challenge a discharge based on high usage prior to filing bankruptcy, using the card for vacations or travel or maintaining large balances.

To avoid such an objection to discharge, careful planning, which usually involves waiting to file, rather than on the heels of Christmas shopping is usually best to avoid any objections to the Bankruptcy filing.  During your initial consultation with a Bankruptcy Lawyer, we will assess your situation with respect to all applicable bankruptcy laws to ensure your case is successful and you are Debt Free!

If there are any general questions or topics you would like to read about relating to bankruptcy law in the Philadelphia, Pennsylvania region, you may contact the Philadelphia Bankruptcy Lawyers at Sadek Law Offices, LLC at 215-545-0008  or email brad@sadek-cooper-site. Thank you.