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St Louis Bankruptcy: Can I Take Out New Debts While I Am Inside Of A Bankruptcy?

The general rule is that you cannot incur new debts while you are inside of a St. Louis bankruptcy. Most of the time, this rule applies to a St Louis Chapter 13. But there are some exceptions to this provision.

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A Missouri Chapter 13 is described as a repayment plan over the course of three (3) to five (5) years. During this period of time, certain debts are paid back. These debts would include things like mortgage arrearage, car notes, back child support, tax debt, and sometimes a portion of your unsecured debts (like credit cards and medical bills). But as you can see, the idea is to get you caught up on your debts (and not to take out new ones).

However, the bankruptcy court does recognize that there are some specific situations in which an individual may need to take out new debt while inside the Ch13. For example, if your employer requires that you travel for your job; and as a result of the traveling, you incur travel, lodging, food, and/or entertainment expenses; and in order to reimburse you for your costs and expenses while traveling, you are asked to charge the expenses to a credit card. In this kind of situation, a motion may be filed with the bankruptcy court asking permission to make use of this credit card for that specific purpose.

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Another example would be student loans. If you are in the middle of Chapter 13 and you wish to further your education, then the court will generally allow you to take out new loans for that purpose. The same process would still be involved (in that a motion would be filed with the court on your behalf by your St. Louis bankruptcy lawyer).

So while the court does not allow you to take out a credit card at Macys to purchase items whenever you want while doing a Ch13, there are certain sets of circumstances which enable you to do so. And the best way to determine whether or not you qualify for such a thing is to speak with a trained professional.

The affordable St. Louis bankruptcy attorneys at Brinkman & Alter, LLC have been saving and protecting people’s assets for years. Our goal is to make sure that you keep the assets and property you want, discharge the debts that you want to get rid of, and do it all at an affordable cost to you. All phone conversations and office consultations are free of charge.