Bankruptcy Attorney Brookhaven

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Brookhaven Credit Card Bankruptcy Attorney
In 2015, there were 11925 bankruptcy filings in the U.S. Bankruptcy Court^[1] Eastern District of New York.  In Nassau County, there were 1979 bankruptcy filings in that same year.   Many of those filings included Chapter 7 consumer bankruptcies with individuals attempting to wipe out credit card debts.
Chapter 7 Credit Card Debt in Nassau County
In Chapter 7^[2] cases credit card debts are usually unsecured claims that are discharged upon the successful completion of the case.  Credit card debts, like most other unsecured obligations, are considered to be nonpriority claims. It is relatively rare for nonpriority creditors to receive any payment in Chapter 7 cases. Any payments that can be made are distributed on a pro rata basis, so that each unsecured creditor, including any credit card company, receives the same percentage of its claim usually nothing or at the most pennies on the dollar.
Exceptions to the Dischargeability of Brookhaven Credit Card Debts
There are some exceptions to the dischargeability of credit card debts including credit cards incurred through fraud, false misrepresentation or false pretenses.  There are two circumstances when credit card charges are presumed to have been incurred through fraud including:

• Luxury goods. When a single credit card is used to buy more than $650 worth of luxury goods or services within 90 days of filing for bankruptcy, the debt is presumed to be nondischargeable. Bankruptcy law defines “luxury goods or services” to exclude “goods or services reasonably necessary for the support or maintenance” of you or your dependents.
• Cash advances.  When a credit card is used to take over $925 in cash advances within 70 days of filing bankruptcy, the debt is presumed to be nondischargeable, regardless of how the money is expended.

Fraud in a New York Bankruptcy
If a credit card company can make a case to the bankruptcy court that a credit card was fraudulently obtained, the court can enter a judgment declaring the debt nondischargeable.  Bankruptcy law recognizes two basic types of fraud:

• Actual fraud. Actual fraud occurs when the debtor (the person who filed bankruptcy) used the credit card with actual intent to defraud the credit card company. An example of this is when a debtor, knowing he or she will be filing bankruptcy, runs up the balance on the credit card, buying things essentially for free. Actual fraud is difficult to prove, and most nondischargeability actions are based on constructive fraud.
• Constructive fraud. Constructive fraud occurs when the debtor does not necessarily have the intent to defraud, but the nature of the debtor’s actions are such that fraud is implied or construed. In bankruptcy, fraud is presumed when the debtor uses a credit card to make luxury purchases of $600 or more during the 90-day period before the bankruptcy filing. This means that if a person uses their credit card to buy $600 or more of luxury goods or services within the 90 days before the date they file bankruptcy, the creditor can sue for nondischargeability based on constructive fraud. Because the purchases are presumed fraudulent, the burden is on the bankruptcy filer to show that they are not.

Brookhaven Cosigners on Credit Card Debt
In a Chapter 7 bankruptcy case, the discharge of credit card debt applies only to the debtor in the case and does not extend to guarantors or cosigners. If anyone else such as a spouse, partner or parent is liable for charges that were made on the credit card, they will still be liable after the bankruptcy case is concluded.
Cancellation of Brookhaven Credit Card Accounts
When a Chapter 7 bankruptcy is filed, it is necessary for an individual to list all of their debts.  Even when there is no balance owed on a credit card, it is still necessary to list the charge account on the bankruptcy papers.  A charge card account is considered a revolving credit account and it is, therefore, affected by a bankruptcy filing.  Unfortunately, once a credit card company learns that a petition for bankruptcy has been filed it will likely cancel the credit card accounts.
Reaffirming Credit Card Debt in a New York Bankruptcy
When a person reaffirms credit card debt in a bankruptcy, they agree that the credit card debt will not be discharged.  At the end of the case, when the other unsecured debts are eliminated, the individual will still owe money on the reaffirmed account.  Some people want to reaffirm their credit card debt so that they can keep their card. But even if a debt is reaffirmed the credit card company can and will likely cancel the card when the bankruptcy petition is filed.  In that instance, the charge account will be cancelled, but the individual will still owe the reaffirmed balance.
In some circumstances, it might make sense to reaffirm credit card debt where there is a very low balance and the person has maintained the card for a long time.   In that situation, it is important to talk with a Brookhaven bankruptcy attorney to determine the best options.
Getting a Nassau County Credit Card After Bankruptcy
Even after an individual files a bankruptcy petition, it does not mean that they will be forever prevented from obtaining a credit card or other consumer financing in the future.  Once the Chapter 7 case closes, an individual is allowed to begin to rebuild their credit.  It is important to speak to a Brookhaven bankruptcy lawyer to discuss the best way to move forward and to rebuild credit after the completion of a bankruptcy case.
Building Credit in Brookhaven After Bankruptcy
One way to begin to reestablish good credit after a bankruptcy is to obtain a secured credit card through a bank or another secured card issuer.  Secured credit cards require a deposit, typically around five hundred dollars.  As long as the individual pays on time every month in which there is a balance, the bank will not touch the security deposit.  In most instances, the credit limit equals the amount of the security deposit.  In order to rebuild credit, it is necessary to pay the balance in full consistently every month and to do so on time.
Contact a Brookhaven Bankruptcy Attorney
If you are considering the filing of a petition for bankruptcy it is important to speak to a Brookhaven bankruptcy attorney who can interpret and apply federal and New York laws and discuss all of the issues that may arise from your financial situation.  Call the office of Ronald P. Weiss today at (631) 296-0361 in order to discuss the specifics of your case and to review all of your bankruptcy solutions.
References:
[1] http://www.nyeb.uscourts.gov/statistics?field_stat_date_value_1%5Bvalue%5D%5Byear%5D=2015
[2] http://www2.nycbar.org/Publications/pdf/Individual_Bankruptcy_Pamphlet.pdf