Why Buying Luxury Items before Bankruptcy May Be a Bad Idea
Going through financial difficulties where you cannot buy the things that you want can be hard for anyone. Sometimes people are tempted, before filing for bankruptcy, to purchase luxury items for themselves so that they can enjoy these items and to use them to pay back debts. However, this practice can be quite risky for those going through bankruptcy, whether Chapter 7 bankruptcy, Chapter 13 bankruptcy, or other forms of bankruptcy, and may end up having negative consequences for debtors.
Reasons to Resist Buying Luxuries before Bankruptcy
Items that are considered to be luxury items can vary widely. In fact, these items can include assets like property, homes, expensive vacations or meals, electronics, vehicles, and many other items. However, if you are considering filing for bankruptcy, you should avoid purchasing any items that might be considered a luxury for the following reasons:
- Creditors viewing purchases as deceitful
- Loss of trust from bankruptcy trustee
- Increasing your debts
- Increased difficulties negotiating with creditors
- Possibility of a court calling it a “luxury expense,” which means a debtor will still have to pay for the item after bankruptcy
For these reasons, a debtor should avoid buying expensive items or property before filing for bankruptcy. In fact, when considering bankruptcy as an option for alleviating much of your debt, a person should speak with a legal representative about the steps they should take, or avoid, prior to filing.
Speak with a Bankruptcy Lawyer in Houston
If you or someone you care about is planning on filing for bankruptcy in Houston, speak with the attorneys at the Russell Van Beustring P.C., to get the legal advice and quality legal assistance you need. Call 713-973-6650 to discuss your situation today.