Bankruptcy Debtor's Plan To Convert Credit Card Debt To Cash

Most people who file bankruptcy do so reluctantly and as a last resort; most bankruptcy debtors are honest people who would pay back every penny if they could afford to do so. Most of my clients feel horrible and ashamed about bankruptcy. And then, there are people who use bankruptcy to make money and wring every dollar they can from their lines of credit and credit cards.

Here’s this week’s bankruptcy scam-plan. A client consulted me about a future bankruptcy filing. I told him he had to postpone bankruptcy because his recent repayment of a loan created a creditor preference issue. Since he had to delay bankruptcy anyway, he asked me about his plan to make the most of it. He would use his untapped credit cards to buy department store gift cards. He did not want to use the cards to shop at department stores. What he planned to do is to sell the gift cards for cash, at a discount, over a web-based gift card market. He would run up credit cards to their limit to buy the gift cards, sell the card for cash, and put the cash in his pocket. Then, he would wait several months until the credit charges "aged" before he would wipe out the credit cards in a bankruptcy. The cash, of course, would not be disclosed. Pretty slick.

 

Naturally, I told this person that I could not be the attorney who would file his bankruptcy knowing what I know. Nor, could I advise him about his plan because I can not help him steal money from banks. When it comes time he’ll find another attorney for the bankruptcy and disclose nothing about the gift card purchases or the cash, and the truth is he’ll probably get away with it.

There are creditors who abuse honest debtors, and then there are debtor who cheat the banks. There are bad actors on both sides. Its not bankruptcy, its not banks, its just people.

Comments

[christopher EDWards]

It is possible for debtors to prevent certain bankruptcy procedures from being heard and granted by the bankruptcy court.

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[obertsp41]

Once the husband dies and the widow remarries another man, all the names given by the dead husband becomes unacceptable and the new husbands avails the right of naming the child again.
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0 Just a second of careless driving is what it takes for an accident to happen. Riders need to be very careful with modern machines capable of reaching high speeds the chance of meeting with an accident is really high. Traffic rules are to be followed strictly and never there should be a breach.
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Debt Management

[James Feuerstein]

Some degree of abuse is inseparable from the proper use of everything.
--James Madison

[Credit Solutions]

The post very usefull , realy somebody used bankruptcy to make money

[Mark Buckley]

Desperate people do desperate things. When a debtor is close to filing bankruptcy, they are afraid to live without the safety net of credit. I'm glad you helped your client understand he would be entering the world of fraud.