Most people are not surprised that it actually takes some money to file a bankruptcy case. There are fees for obtaining the required credit counseling certificate, a court filing fee and the fee you pay your attorney to help you file the case. Those fees can vary depending on where you live and the complexity of your case. When you visit with a bankruptcy attorney to discuss your case, the attorney will likely give you an estimate of the costs associated with filing a case for you.

This may seem daunting for you. Chances are you’re dealing with some financial stress. It is not surprising that it may be hard to come by those up-front fees.

Hopefully, you are not one of those people who waits until he’s used up the last of his resources before he finally considers whether he can benefit from a bankruptcy case, which can making filing a bankruptcy even more difficult emotionally and financially.

Charging Fees to Your Credit Card

You will, no doubt, look at your current financial picture. Perhaps you haven’t quite maxed out a credit card or two. Perhaps you think that you might be able to use that last bit of credit to cover the cost of filing your bankruptcy case. After all, you think, the balance on the card will be discharged. Everyone gets paid and you won’t have to come up with any actual cash to pay the fees.

But, what about the credit card issuer? That bank is out whatever you charged to cover your costs. In fact, under the law, charging something on your credit card with the intention of discharging it in bankruptcy is considered fraud against the creditor.  

Most bankruptcy attorneys will take a credit card to pay for fees only when the card is in the name of someone other than the person filing the bankruptcy case. It is not unusual for a friend or family member to give the filer the money to file the case, and for convenience, that person may ask to charge it. This may be acceptable to your bankruptcy attorney.

Using a Cash Advance

But, you may think, “What if I take a cash advance? The creditor would not know what I am using the money for, and the attorney will not know where the money came from.” The bankruptcy laws anticipate and squarely (and harshly) address this possibility. The Bankruptcy Code at 11 U.S.C. § 523 states that cash advances that total more than $925 made within 70 days before filing a bankruptcy case are presumed to be fraudulent. In other words, the law assumes that the cash advances you take out during that pre-bankruptcy period were made with the intent of including them in the bankruptcy discharge.

The Attorney Fee Disclosure

The bankruptcy laws include another obstacle to using credit cards to pay for the bankruptcy case. Your attorney is required to file a disclosure document with the bankruptcy court that indicates the origin of her attorney’s fee. This fee disclosure is designed to protect you, particularly to ensure that your attorney is not over-charging for services or using undue influence in charging her fees.

What You Can Do to Fund the Cost of the Bankruptcy Case

You can’t get around it. Charging your fees or taking a cash advance to pay the fees is not a good idea. You could end up having to deal with your credit card bank long after the bankruptcy case is completed.

There are better ways to come up with the money to file a bankruptcy case. The Law Offices of Melanie Tavare of Hayward and Oakland can help you find the money to fund your case. Make an appointment today to discuss these concerns. You will be glad you did. Contact The Law Offices of Melanie Tavare at 510-255-4646 or online.

The Law Offices of Melanie Tavare is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.