Spending money before filing a Bankruptcy in New York

Someone I know recounted a story to me the other day of how a friend of theirs owed them money.  When this person asked to be repaid, the friend said “I can’t right now.  I have the holidays coming up.  Early next year.”  So that got me to thinking of the application to spending during the holidays and Chapter 7 Bankruptcy in New York.  Heres the jist.  If you know you’re going to be filing a Bankruptcy in New York in the near future, don’t spend  money on your credit cards during the holidays.  Don’t go to the mall.  Don’t buy flat screens.  Don’t book a trip.

In the past few months I have seen several people who are being examined in a Bankruptcy case (testifying under oath…”examined” sounds so creepy) and have been stating that they used their credit cards as early as a month before filing.  Thats a no no.  Creditors can look to 90 days prior to the filing of the Bankruptcy to see if any charges were made on the cards (the presumptive period) and they can then send a letter and say “You bought a new 3-D TV 3 weeks before you filed Chapter 7.  Pay up.”  You dont want that.  I don’t want that.  So the whole point is if you know you’ll be filing, leave the plastic at home.

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