Can I Max my credit cards prior to filing for bankruptcy?
People who are in financial difficulties and have unused room on their credit cards and lines of credit often wonder if they can use the unused credit limit before filing for bankruptcy.
The simple answer to this question is No. What I know is that, creditors may oppose your bankruptcy on the ground of bad faith or even fraud.
It is bad faith to borrow from your credit cards while you already have every intention to declare bankruptcy or you have already planned to declare bankruptcy.
Once your creditors know of the fact that you took funds from your credit cards and or line of credits within ninety days from the filing of consumer proposal or bankruptcy, creditors would oppose your proposal and bankruptcy.
Even if you do not max-out your credit cards or line of credits, for as long as you took out money within ninety days prior to consumer proposal or bankruptcy, your creditors have the right to oppose it.
Aside from opposing your proposal or bankruptcy your creditors have the option of filing a criminal charge of fraud against you.
Consumer Proposal or bankruptcy is designed to help consumers who are in financial difficulties to start their lives again free from pressure or harassment from creditors.
If your intention is to be free from your debts that you can no longer handle and start afresh, then file for bankruptcy, but do not do anything that would violate the law and put you in deeper trouble than you bargained for.
If you need further information about mortgage or debt problems, contact
Ken Ntiamoa, MBA
BIA Insolvency Counsellor
(416-398-1877 ext 201)