Abusive spending is not a circumstance to file for Chapter 7 bankruptcy. You cannot abuse bankruptcy rules with excessive spending. A wife’s spending was not considered discretionary spending https://www.investopedia.com/terms/d/discretionary A wife’s spending spree leads to a debt that is not discharged in bankruptcy.
- Husband and Wife had a joint account with a limited credit line.
- Bank made error and increased the allowable credit limit to $100,000.
- Wife took full advantage of the situation and began to go on a spending spree; charging in excess of $80,000.
- Husband had no knowledge of the situation at the time.
- Wife handled all the finances.
- When the bank demanded this money be paid back through a payment plan, wife informed husband of the situation.
- Couple filed for Chapter 7 bankruptcy.
- Bank filed an adversary proceeding.
- Although the bank made an error in the credit limit, the bank was not responsible.
- Wife was fully aware of the situation and took advantage; regardless of the fact that the husband was unaware.
- Debtor-wife’s obligation to the bank is a non-dischargeable debt.
- Exploiting a situation and knowingly taking advantage is unacceptable to a Bankruptcy Court.
- Debt was not allowed in the bankruptcy.
Remember not all debts are dischargeable in Chapter 7 bankruptcy. Abuse of the bankruptcy rules and code is not acceptable to the Bankruptcy Courts.
I remind clients that honesty and coming to the bankruptcy court in good faith is essential https://njbankruptcylawfirms.com/drs-wife-diverts-funds-to-herself-and-files-bankruptcy/. You cannot have excessive spending in bankruptcy. The Debt will not be dischargeable.