General Questions about Bankruptcy

Bankruptcy Attorneys Serving Central California Since 1970


		Saturday, July 5, 2008

Bankruptcy FAQ

My checking account and credit card are from the same bank; can the bank take money out of my checking account to cover my missed credit card payments?

No. A bank that takes money out of a deposit account to cover a missed credit card payment violates the federal Truth in Lending Act. You can sue for damages -- the amount taken out of your account and any other damages you suffer, such as lost interest or bounced check fees.

My wallet was stolen. Will I have to pay the charges the thief made using my credit cards?

No. Federal law limits your liability for unauthorized charges made on your credit or charge card after it has been lost or stolen. If you notify the card issuer within a reasonable time after you discover the loss or theft -- usually 30 days -- you're not responsible for any charges made after the notification, and are liable only for the first $50 for charges made before you notified the card issuer. Rarely will a card issuer even charge you the $50.

I purchased an item using my credit card and it fell apart. Can I refuse to pay?

Under federal law, you must first attempt in good faith to resolve the dispute with the merchant. If that fails, you can withhold payment only if the purchase was for more than $50 and was made within the state you live in or within 100 miles of your home. This limitation applies only if you used a card not issued by the seller, such as a MasterCard. There is no $50, 100-mile or in-state limitation if you use the seller's card, such as your Sears card.

The 100-mile limitation is easy to calculate when purchases are made in person. But if you order through the mail or over the telephone, the law is unclear as to where the purchase took place. You can claim that the purchase was made in the state in which you live (even if the catalogue company is on the other side of the country) because you placed the order. You have to hope the seller doesn't fight you.

DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.

View Previous Months' Selections

Learn More: Bankruptcy Law

Should I list my monthly obligations, like my utility bills, in my bankruptcy case if I am current on such payments?

Generally no. If the debtor is current on his or her payment of certain monthly obligations such as utility bills, there is no point in listing the utility company as a creditor. In fact, by listing it as a creditor, it might prompt the utility company to demand a deposit for future services.