Using a credit card before filing bankruptcy is legal, but charges you make in the weeks and months before you file can be pulled out of your discharge and left on your tab. Two categories are automatically suspect: luxury purchases over $900 to a single creditor within 90 days of filing, and cash advances over $1,250 within 70 days. Outside those windows, creditors can still challenge charges they believe you made knowing bankruptcy was coming. Once filing is a realistic option, the safest choice is to stop charging.
The Two Automatic Red Flags
Federal bankruptcy law creates two bright-line rules that make certain pre-filing charges presumptively nondischargeable. If a charge fits, you’ll likely still owe it even after your other debts are wiped out. The dollar thresholds were most recently adjusted on April 1, 2025.1Federal Register. Adjustment of Certain Dollar Amounts Applicable to Bankruptcy Cases
The first rule covers luxury goods and services. Consumer debts totaling more than $900 to a single creditor for luxury items, charged within 90 days before filing, are presumed nondischargeable. “Luxury” means anything not reasonably necessary for your or your dependents’ basic support. Expensive electronics, designer clothes, vacations, and elective cosmetic work qualify. Groceries, basic clothing, and similar essentials do not.
The second rule covers cash advances. Cash advances totaling more than $1,250 taken within 70 days before filing are also presumed nondischargeable.2Office of the Law Revision Counsel. 11 US Code 523 – Exceptions to Discharge
These are presumptions, not convictions. You can overcome them by showing the charges were genuinely necessary or that you had a reasonable expectation of repaying when you made them. But the burden is on you, and courts are skeptical when someone runs up charges shortly before seeking debt relief.
Fraud Claims Outside the Look-Back Windows
Charges older than 90 or 70 days are not automatically safe. A creditor can still argue you obtained the credit through false pretenses or actual fraud, whether the charge was made six months or a year before filing.3Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge Outside the presumption windows the creditor carries the burden of proof, but courts use a well-developed set of factors to decide whether you intended to repay when you swiped the card.
Those factors include:
- How close the charges were to your filing date
- Whether you had already consulted a bankruptcy attorney
- Whether you exceeded your credit limit
- Whether you made multiple large charges on the same day
- Whether you were employed at the time
- Whether your overall spending pattern suddenly changed
- What you bought — necessary items weigh in your favor, splurges do not4GovInfo. National Bankruptcy Review Commission Report – Consumer Bankruptcy
This is where people get tripped up. They assume that because a purchase falls outside the 90-day or 70-day window, it’s safe. It isn’t. The windows just make it easier for creditors. Outside them, creditors can still win; they just have to work harder to prove intent.
Balance Transfers Are Their Own Problem
Moving a balance from one card to another shortly before filing raises a separate red flag. A balance transfer creates new debt with a new creditor, and if a court finds you made the transfer knowing you’d file, the new creditor can argue you obtained credit through fraud. The closer the transfer is to your filing date, the worse it looks. This applies even when the underlying debt is old, because the transfer itself is what the court examines.
There is no specific dollar threshold or look-back period for balance transfers. Creditors have to prove fraud using the same totality-of-circumstances analysis courts apply to other pre-filing charges. But timing alone often tells the story. Transfer $8,000 to a new card two weeks before filing, and expect that creditor to object.
What Happens If a Creditor Challenges You
A creditor who believes you charged with no intention of repaying files an adversary proceeding, essentially a lawsuit inside your bankruptcy case. The creditor pays a $350 filing fee and must prove fraud or invoke one of the presumptions.5United States Courts. Bankruptcy Court Miscellaneous Fee Schedule
If you lose, the specific debt at issue survives your bankruptcy. You’ll owe it even after your other debts are discharged. And the cost isn’t just the debt. Defending an adversary proceeding typically requires at least 10 to 15 hours of attorney time, and contested cases can run two or three times that. If you’re filing bankruptcy because you can’t pay your bills, an unexpected legal fight is the last thing your budget can absorb.
In extreme cases involving widespread fraudulent behavior, a court can deny your entire discharge rather than carve out specific debts. Federal law lets a court refuse any discharge if you concealed or destroyed financial records, made false statements under oath, or hid property from the bankruptcy estate within one year before filing.6Office of the Law Revision Counsel. 11 USC 727 – Discharge A denied discharge means you went through the whole process and still owe every dollar.
How to Protect Yourself Before Filing
Stop Charging
Once bankruptcy is on the table, stop using credit cards. Every charge from that point forward is a charge a creditor can point to and say you never planned to repay. Genuine necessities like groceries, medication, and utilities are less likely to cause problems, but even necessary charges look suspicious when they coincide with bankruptcy planning. If you have essential expenses, pay cash or use a debit card. Keep receipts for recent credit card purchases so you can show they were for basic needs if challenged.
Most bankruptcy attorneys recommend stopping all credit card use at least 90 days before filing, which lines up with the luxury-goods look-back. Longer is better. The more time between your last charge and your filing date, the less ammunition creditors have.
Talk to a Bankruptcy Attorney Early
An attorney can pull your recent statements and flag charges likely to trigger adversary proceedings. They can also advise whether waiting a few additional months would push problematic charges outside a look-back window or weaken a creditor’s fraud argument. Attorney fees for a straightforward Chapter 7 case generally run $800 to $3,000, and Chapter 13 cases typically cost $2,500 to $7,500, though those figures vary by location and complexity. Getting advice early often costs less than defending a challenge that better timing would have avoided.