Can my boyfriend make large purchases before bankruptcy? 31 Answers as of June 10, 2013

He is filing for chapter 7 and is spending all his money on gifts and expensive things he thinks the court won't take away from him. Is this ok?

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Law Offices of Michael J. Berger
Law Offices of Michael J. Berger | Michael J. Berger
No, it is not ok.
Answer Applies to: California
Replied: 7/15/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
It is not ok. It is bankruptcy fraud and fraud on the creditors.
Answer Applies to: California
Replied: 7/14/2011
Ray Fisher Law Offices
Ray Fisher Law Offices | Ray Fisher
No it is not ok. He needs to talk to a lawyer about what he is doing and he needs to stop it.
Answer Applies to: Texas
Replied: 7/14/2011
Law Office of Lynnmarie A. Johnson
Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
No, that is fraud. The trustee can take the items and sell them or even deny him. A discharge based on committing fraud. Further, if he is doing this on a credit card company, the card company will come after him on the issue.
Answer Applies to: Michigan
Replied: 7/14/2011
Benson Law Firm
Benson Law Firm | David Benson
Your boyfriend may have a problem in bankruptcy. He may have to give up some of those expensive toys and the gifts may have to be disgorged. It is better to plan a bankruptcy filing with an experienced and competent bankruptcy attorney.
Answer Applies to: Ohio
Replied: 7/14/2011
    The Law Offices of Alan M. Laskin
    The Law Offices of Alan M. Laskin | Jared B. Gaynor
    If he is wasting assets of the BK prior to filing, ad the Trustee finds out, he can be denied a discharge in the BK, AND the things may be taken to replenish the estate.
    Answer Applies to: California
    Replied: 7/14/2011
    Eric J. Benzer, Attorney at Law
    Eric J. Benzer, Attorney at Law | Eric Benzer
    No. it's called fraud.
    Answer Applies to: Maryland
    Replied: 7/14/2011
    Mercado & Hartung, PLLC
    Mercado & Hartung, PLLC | Christopher J. Mercado
    This will catch the Trustee's eye and likely be challenged, discharge will be at issue as to these purchases
    Answer Applies to: Washington
    Replied: 7/14/2011
    Uriarte & Wood, Attorneys at Law
    Uriarte & Wood, Attorneys at Law | Robert G. Uriarte
    Not only is this not OK, he is committing bankrutpcy fraud and can be prosecuted criminally in addition to having all of his debt deemed to be non-dischargeable. It appears he is making purchases for which he has no intention of paying shich is fraud and making all of these purchases and disposing of property in contemplation of of a bankrutpcy filing is a crime.
    Answer Applies to: California
    Replied: 7/14/2011
    Law Offices of Lawrence J. Marraffino, P.A.
    Law Offices of Lawrence J. Marraffino, P.A. | Lawrence J. Marraffino
    That would likely be considered fraud. I would strongly advise against that.
    Answer Applies to: Florida
    Replied: 7/13/2011
    The Law Office of Marvin Wolf
    The Law Office of Marvin Wolf | Marvin Wolf
    Since you are troubled enough to ask the question means you already know the answer. Bad behavior before filing such as concealing assets or going on a spending spree can stop him from getting a discharge in bankruptcy. The petition and schedules specifically ask the debtor about this type of behavior. If a debtor lies, he can go to jail. It's a federal crime - and even cute little old ladies have been sent to jail. A bankruptcy discharge goes to the "honest but unfortunate" debtor who has had a run of bad luck. Hogs get slaughtered. There are always some people who think they can cheat their creditors and outsmart the bankruptcy court. They always think they are clever and that they are the first person to think up such a scheme. Lawyers have a technical name for such people. We call them "prisoners."
    Answer Applies to: New Jersey
    Replied: 7/13/2011
    Rosenberg & Press
    Rosenberg & Press | Max L. Rosenberg
    Let's be honest with each other. You know that this isn't right. In fact I am sure if you and your boyfriend think long and hard about it you'll understand why this is called bankruptcy fraud. The 2005 Bankruptcy Abuse and Prevention Act was created with people just like him in mind. Spending your credit with the intent of discharging it in bankruptcy is a federal crime. Bankruptcy crimes are punishable by fines and prison time. If he is doing this, most likely the debts will not be dischargeable, his bankruptcy will be dismissed and he may be charged with crimes. But you already know this is unethical because it feels like stealing, so I'm sure it comes as no surprise when a snide and harsh attorney tell you it's wrong and a crime to boot. And lastly, if your boyfriend is filing bankruptcy, his attorney should have already told him this. And if his attorney did not, shame on him. And If your boyfriend thinks he is smart enough to file his bankruptcy without an attorney, shame on him. Maybe its time to find a new boyfriend?
    Answer Applies to: Connecticut
    Replied: 7/13/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    If he owns these things by purchasing them outright, he needs to be able to exempt them. Otherwise the trustee can take them and sell them. If he is buying them on credit, the creditor can file a lawsuit in bankruptcy to keep those charges from being discharged and he would still be liable after the bankruptcy.
    Answer Applies to: California
    Replied: 7/13/2011
    Apple Law Firm PLLC
    Apple Law Firm PLLC | David Goldman
    Yes he can, but it will probably not do him any good. Depending on the purchase, he may have to repay the money. There are some exceptions like a home (homestead) purchase (with a $125K maximum value in FL if within 1215 days)
    Answer Applies to: Florida
    Replied: 7/13/2011
    Law Office of Asaph Abrams
    Law Office of Asaph Abrams | Asaph Abrams
    No, it's very not okay.
    Answer Applies to: California
    Replied: 6/10/2013
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    Not on his credit cards. That would be fraudulent, his discharge could be denied, and he could end up in Federal prison.
    Answer Applies to: Virginia
    Replied: 7/13/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    It depends. Is he using credit cards to make these purchases or is he paying cash? If he is paying with a credit card then any charges made within 3 months of filing for bankruptcy is presumed fraudulent and he will probably be forced to pay it back. If he is paying cash then he will still need to disclose the asets he is purchasing in his bankruptcy paperwork.
    Answer Applies to: California
    Replied: 7/13/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    It sounds like (1) Your boyfriend is an idiot and (2) He will end up with a mess. You may want to look for a better boyfriend. Large purchases before a bankruptcy are a huge problem. If charged, the debts will not be dischargeable and may result in a denial of discharge. Also, the assets may not be exempted, and be taken from him. If it can be shown he deliberately committed fraud, he could even go to jail. But he will mess up his case regardless. The gifts will also result in the Trustee suing the recipients so he will ruin their lives, as they will have huge legal fees and will have to give the gifts, or their value, back. Your friend had better get a good lawyer. And he'd better stop his plans. And, seriously, look for a boyfriend with a future (and brains).
    Answer Applies to: Georgia
    Replied: 7/13/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    Running up the credit cards and taking cash advances before filing bankruptcy is the quickest way to have all of the debt deemed non-dischargable and sometimes subject you to criminal fines and jail time.
    Answer Applies to: Indiana
    Replied: 7/13/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    Purchasing large assets in anticipation of bankruptcy may constitute fraud that would not be dischargeable.
    Answer Applies to: California
    Replied: 7/13/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    No, it is not OK.... it is bankruptcy fraud. The credit card company can demand repayment and he could end up having his case dismissed or the discharge denied. There is also the possibility of criminal charges. Purchases within the last 90 days of filing that are for luxury items or services are presumed fraudulent but the credit card company can go back up to a year before filing and demand payment of the amounts charged that were for luxury items or services. What he is doing is very risky. It is not just giving back things he bought or paying for them later but having those debts not discharged ever and even going to jail. T
    Answer Applies to: California
    Replied: 7/13/2011
    Symmes Law Group, PLLC
    Symmes Law Group, PLLC | Richard James Symmes
    NO, you should not make large purchases prior to filing bankruptcy. It could be considered fraud and you will be liable for the debt.
    Answer Applies to: Washington
    Replied: 7/13/2011
    Law Offices of Alexzander C. J. Adams, P.C.
    Law Offices of Alexzander C. J. Adams, P.C. | Alexzander Adams
    This is a bad move. It is essentially fraudulent conduct. He is risking his discharge and he is opening the possibility to getting the recipient's of his gift sued. While there are ways to protect some assets prior to filing, this is not the way to go. He should speak to a bankruptcy attorney immediately. He is also bound by threat of perjury and a $250,000 fine to disclose these transfers on his bankruptcy petition.
    Answer Applies to: Oregon
    Replied: 7/13/2011
    Law Office of Eric Ridley
    Law Office of Eric Ridley | Eric Ridley
    No. The court can unwind any purchases, or set them aside from the bankruptcy. Courts see this behavior all the time, and will not let him get away with it. You should caution your boyfriend that he is playing with fire.
    Answer Applies to: California
    Replied: 7/13/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Bad and possible fraud, especially if he's using creditto do it. If he's using his own money and the money would have been protected anyway, should not be an issue.
    Answer Applies to: California
    Replied: 7/13/2011
    Dan Shay Law
    Dan Shay Law | Daniel Shay
    The creditors could file Objections to Discharge on the basis of fraud. They could allege he knew he was filing Bankruptcy when he made the purchases, had no intent to repay the debt, so the debt should not be discharged.
    Answer Applies to: California
    Replied: 7/13/2011
    Judith A. Runyon, Esq. Attorney at Law
    Judith A. Runyon, Esq. Attorney at Law | Judith A. Runyon
    It is called Fraud.
    Answer Applies to: California
    Replied: 7/13/2011
    Law Offices of Joseph A. Mannis
    Law Offices of Joseph A. Mannis | Todd Mannis
    We call that bankruptcy fraud. At the least the creditors will prevent his discharge. At worst, well, you don't want to go there. Hope it was worth it.
    Answer Applies to: California
    Replied: 7/13/2011
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