You realize that you’re going to need to declare bankruptcy. There’s just no way that you can afford all of the debt that you have. It may not be your fault — maybe you lost your job or ran into unexpected medical debt — but it’s true either way: Your debt is unaffordable and you need a solution.
You decide that you want to declare Chapter 7 bankruptcy, which will eliminate your debt. Once you make that choice, though, you wonder if you should just run up the charges on your credit cards. What’s a few thousand dollars more if you’re going to declare bankruptcy anyway?
Don’t make unneeded, out-of-character purchases
You can spend on your credit cards for necessary bills. Bankruptcy can take months. You still need to buy food, put gas in the car, etc. You can’t avoid this, and paying normal bills on credit is fine.
Just do not make any massive purchases that could be viewed as unnecessary or out of character. This could make it look like you’re trying to commit fraud. That could lead to a whole host of issues, not the least of which is that you may not get approved for bankruptcy.
In some ways, major purchases don’t matter anyway. Chapter 7 liquidates your non-exempt assets, so you’d just have to give up whatever you bought.
Of course, you could spend on non-returnable items, such as meals at a fancy restaurant or a trip overseas. That’s when it really begins to look like attempted fraud, though, as if you were spending that money with no intention of ever trying to pay it back. Bankruptcy is a useful tool, but the court may see this as an abuse of the power and options that it gives you.
Overall, it’s best to just stick to your normal spending habits until the bankruptcy process is over.
Navigating the system
If you have never used bankruptcy before and that’s why you have these types of questions, you need to know that it can be a complex system. You must understand what steps to take to navigate it and seek financial relief.