Can I use my Credit Card to Pay My Bankruptcy Attorney?

Wipe Out DebtYou can’t pay your Carrollton TX bankruptcy lawyer with your credit card.  Using a credit card prior to filing bankruptcy can create grounds for objecting to discharge of the debt.  When you use a credit card you are telling the company issuing credit that you intend to pay them back.  But if you use a credit card and then file bankruptcy the debt is discharged without repayment.

Borrowing money with no intention to repay the debt is fraud.  Once the debtor makes the decision to file bankruptcy he should stop borrowing money.  If a creditor believes that the debtor committed fraud in borrowing money then they may file an adversary proceeding in the bankruptcy court.  An adversary proceeding is a lawsuit in the bankruptcy court brought for a specific reason that is related to the bankruptcy case.  For example, when a creditor violates the automatic stay the debtor can sue the creditor in the bankruptcy court.

Similarly, when a debtor borrows money fraudulently prior to filing bankruptcy the creditor can sue the debtor in order to have the debt excepted from the discharge order.  The most common set of facts giving rise to this type of lawsuit have to do with debtors using credit cards right before filing bankruptcy.  If the creditor wins then the debt is not discharged at the end of the bankruptcy case, which means that the creditor can continue to collect on their claim.  The balance will usually be higher as well due to interest, fees, and the cost of the litigation.

However, debtors can use other people’s credit cards to pay their attorney’s fee.  If a family member or friend wishes to pay for the debtor’s bankruptcy case, then there is nothing to prevent them from using their credit card to pay these costs.  The debt isn’t owed by the debtor so it is not discharged in the bankruptcy case.  If the debt is not discharged then there is no fraud in incurring the debt.