Can I Load Up On Debt Just Before The Bankruptcy?
Can I load up on debt just before the bankruptcy?
Maybe you've heard the term "bankruptcy cramdown" before. It's a phrase that means "the debt is reduced to the value of the assets." The idea is that, once the debt is calculated, your creditors get paid back and you're left with whatever else is left. It's a great way to get out of debt.
The trouble is that bankruptcy requires you to submit a full list of your debts, so if you have a lot of really expensive stuff and not much cash on hand, it's going to come out looking like you don't have much in the way of assets. But there are some things that you can do to make yourself look more solvent than you really are—especially if you're trying to get rid of credit card or student loan debt.
As long as you don't own anything valuable or can't prove that it has significant value (like an insurance company), it might be smart to run up a huge bill on some credit cards or take out a high-interest student loan just before filing for bankruptcy. And then, once the bankruptcy is complete, all those bills will be written off as part of your bankruptcy plan.
If you have any questions or need a Debt and Bankruptcy Lawyer, please call this law firm for a free consultation.
Ascent Law LLC
8833 S Redwood Road Suite C
West Jordan UT 84088
(801) 676-5506
