What would happen if you took out $20,000 in cash advances and then defaulted a few months later?
ByI am worried about job loss and need we need money for daycare, gas money, etc.
We are already in debt. If I were to take out large advances but were unable to pay it back, what would happen?
I understand a judgement could be brought against me, but couldn’t you just declare bankruptcy?
CAREFUL: It is bankruptcy fraud if you incur new debt that you have no intention to repay (i.e., after you know that you need to file bankruptcy).
There can be a thin line there — if you incur new debt that you absolutely DO (realistically) intend to repay because you DO intend to actively seek and obtain new employment with sufficient remuneration that you can realistically expect to repay the debts you incur — then that is probably not fraud, even if something happens and you don’t obtain that new employment you’d been counting on.
It is NOT bankruptcy fraud to be aware of the bankruptcy laws, and to know somewhere in the back of your mind that if worse comes to worst, at least you won’t wind up in debtors’ prison in the United States, because we don’t have debtors’ prisons here.
But it IS bankruptcy fraud to borrow the money with the intention of filing bankruptcy at a later date.
For more information talk to a bankruptcy attorney (most offer one free appointment) to discuss the specifics of your situation — and also to discuss the specific differences between non-criminal "bankruptcy planning" and criminal "bankruptcy fraud" - the distinction between which can be confusing for most non-attorneys.
5 Comments
January 4th, 2010 at 9:38 am
You can declare bankruptcy that will nullify a judgment. However, if you take a loan shortly before filing for bankruptcy that loan might not be discharged. It will depend on the facts and circumstances.
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January 4th, 2010 at 10:11 am
You can be charged with "obtaining finance through deception".
There is a way around it. Try to make a couple of payments 1st.
But ur intention is to default on the loan and that, is deception .
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January 4th, 2010 at 10:30 am
CAREFUL: It is bankruptcy fraud if you incur new debt that you have no intention to repay (i.e., after you know that you need to file bankruptcy).
There can be a thin line there — if you incur new debt that you absolutely DO (realistically) intend to repay because you DO intend to actively seek and obtain new employment with sufficient remuneration that you can realistically expect to repay the debts you incur — then that is probably not fraud, even if something happens and you don’t obtain that new employment you’d been counting on.
It is NOT bankruptcy fraud to be aware of the bankruptcy laws, and to know somewhere in the back of your mind that if worse comes to worst, at least you won’t wind up in debtors’ prison in the United States, because we don’t have debtors’ prisons here.
But it IS bankruptcy fraud to borrow the money with the intention of filing bankruptcy at a later date.
For more information talk to a bankruptcy attorney (most offer one free appointment) to discuss the specifics of your situation — and also to discuss the specific differences between non-criminal "bankruptcy planning" and criminal "bankruptcy fraud" - the distinction between which can be confusing for most non-attorneys.
References :
Former Legal Assistant with a bankruptcy law firm
January 4th, 2010 at 10:44 am
If you took large cash advances and defaulted, you would be sued and your wages garnished and assets possibly seized. Yes, you could declare bankruptcy, but the consequences from that will remain with you for ten years. You may find it difficult to get a different job (many if not most employers check your credit history before offering employment), rent an apartment, buy a home or vehicle, or get services such as utilities, cable or phone.
If you were to file for bankruptcy, your creditors could object to the discharge of any cash advances taken 90 days or less before you filed.
References :
http://www.smartmoney.com/personal-finance/debt/understanding-the-bankruptcy-rules-15647/#6
January 4th, 2010 at 11:16 am
Really its probably not best and it can get you in worse trouble. But sometimes its the only choice. Good luck.
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