Consumer Bankruptcy:

Balance Transfers

Transferring balances, which is often used to lower the minimum payment, can become very problematic, especially when filing for bankruptcy. Transferring balances does not eliminate debt; it only makes one debt disappear by creating another one. If you have no intention of paying the new debt (as proved by the credit company), the court could find that debt to be incurred through fraud. As a consequence, it would not be discharged through bankruptcy. Furthermore, “convenience checks” and other methods of borrowing off the new credit card, like cash advances, should be avoided. Any of these that occurred within 60 days of filing for bankruptcy is automatically determined to be fraudulent. While there are some courts that investigate this further and may not deem them to be fraud, there is no way to be sure this would be the result in your case. You would have to further prove that you had the full intent to pay off the cash advance. Consequently, it is best to avoid them altogether when struggling with debt, as they can create more problems than they can solve.