If I Get a Cash Advance Before Filing Bankruptcy Will It Affect My Case?

Cash Advances and Bankruptcy

A cash advance is known as either a payday loan or cash withdrawal from a credit card. A cash advance as a payday loan allows consumers to borrow money against their next paycheck. A cash advance as a withdrawal from a credit card allows consumers to withdrawal money from their available credit on the card from an ATM or debit transaction using a pin number. So is it possible for a cash advance to affect your bankruptcy filing?  Yes, but it depends on the chapter and timing of the filing.

Cash Advance Before Bankruptcy

The timing of your bankruptcy filing may be considered the most important aspect of whether or not the cash advance can be discharged or eliminated. Usually, advances made within a 90 day period of your bankruptcy filing may not qualify for discharge. Keep in mind, the court may look to review large cash advances or other information submitted as part of your case for signs of fraud.

Chapter 13 bankruptcy May Allow You to Repay the Cash Advance

Chapter 13 bankruptcy may allow you to repay the advance to the creditor through a repayment plan with court approval. A credit may look to prevent a cash advance from being discharged in a Chapter 7 bankruptcy , yet there is a possibility of the advance being discharged in either chapter under favorable conditions. It is common for people to utilize cash advances for necessary living expenses, but you’ll want to review advance activity with your legal representative. If you feel filing bankruptcy is in the near future, it’s likely you shouldn’t complete a cash advance.

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