economy
January 23, 2026
When should you stop using credit cards if you're filing for bankruptcy?
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TL;DR
- Americans are facing record credit card debt ($1.21 trillion) with average interest rates above 22%.
- Purchases made within 90 days of filing for bankruptcy are presumed to be without intent to repay.
- Luxury purchases over $800 or cash advances over $1,100 within 90 days are particularly vulnerable.
- Charges made 90 to 180 days before filing can also be scrutinized, especially if substantial or frivolous.
- Discretionary spending is viewed more critically than essential purchases like groceries or medical expenses.
- Stopping credit card use at least 90 days before filing is crucial to avoid objections and accusations of fraud.
- Alternative debt relief strategies include debt consolidation, debt settlement, and credit counseling.
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