Bankruptcy Basics: No Credit Cards

Spending sprees can be considered acts of fraud in the Texas bankruptcy courts, and the success of your filing will be made much more difficult with a spending spree on your record.  However, spending sprees are just the beginning of the problems you could face in court if you don’t practice smart money management.

Avoiding Credit Cards

During the time leading up to your filing, it’s smart to avoid credit cards altogether if at all possible.  It may be that a credit card is your only means of purchasing essential items like gasoline or groceries.  If that’s what you have to do, then it’s your only option.

However, if you have any other kind of alternatives when it comes to using a credit card, use those alternatives.  The Texas bankruptcy courts don’t like to see credit card usage.  So, keeping it to a minimum is always best.

Avoiding Cash Advances

This one however is a must: avoid cash advances.  When you take a cash advance out from your line of credit shortly before filing for bankruptcy, you will be required to pay that cash advance back.  Needless to say, it doesn’t look good for your case either.

Cash can be rather mysterious.  Sure, you took the cash advance to buy bus fare for the month, but that’s a difficult thing to prove.  It could look like fraud to the courts, and they may even try to make a case against you.