Can I Max Out My Credit Cards and Then Go Bankrupt
You could max out your credit cards and then go bankrupt, as long as you do not wish your bankruptcy to go smoothly. Your trustee is obligated to review your spending for the period immediately before you file the bankruptcy. As well, all of the creditors will, by computer, review your charges on credit cards or debits looking for increased spending in the period prior to the date you filed the assignment in bankruptcy. The normal review period is 90 days but his can go to one year (5 years if real estate is involved) if the creditors or trustee has any hint of wrongdoing. If you make a significant purchase or cash withdrawal just before filing your bankruptcy, this is considered to be an offence under the Bankruptcy and Insolvency Act. The trustee, a creditor or the Office of the Superintendent of Bankruptcy will file an Opposition to your discharge from bankruptcy. You also might be required to attend an examination under oath to explain what you did and why you did it. This will result in your bankruptcy taking longer to complete as you may be required to attend a court hearing to obtain your discharge from bankruptcy. As well, you will be likely required to pay to the trustee the amount of the purchase or cash advance that you took. The trustee, of course, distributes these funds to the creditors. In extreme circumstances, the matter could be turned over to the police for investigation which may result in criminal charges of fraud. A finding of fraud results in the debt involved surviving both a bankruptcy or a proposal.
And all you wanted to do was buy that 60” TV or send money to help your family who are in a poor financial situation. Not a good idea.
So to answer your question, Can I Max Out My Credit Cards and Then Go Bankrupt? The answer is NO.
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