Your debt burden may feel dire enough that filing for Chapter 7 bankruptcy maybe your best option to clear your debt and make a fresh financial start. But to qualify for bankruptcy, you want to make sure you do not do anything to endanger the approval of your bankruptcy petition, like spending too much money shortly before filing.
The problem with spending money before bankruptcy is that it can make it look like you are going bankrupt just to avoid your responsibilities to pay off your debts. Bankrate provides some information that may help you to avoid spending money that could harm your bankruptcy.
Using your credit card
Your credit card may already have a large balance on it, so spending more money on the card just as you file your petition is going to look suspicious. A judge may conclude you are misusing the bankruptcy process to rack up frivolous purchases. If possible, refrain from charging any more expenses on your credit card.
Making large expenses
You could run into trouble if you make any large expenses just before you file your Chapter 7 petition or shortly thereafter. Spending large amounts on furniture or electronics could make it seem like you are trying to defraud the bankruptcy system. But even if a judge grants your bankruptcy, you may not be able to keep whatever you have purchased since a bankruptcy trustee may liquidate it anyway to pay off some of your debt.
Paying off personal debts
Ironically, paying off debts shortly before bankruptcy may not be helpful, especially debts to friends or family members. Paying off relatives could make it seem like you want to hide money from creditors while gaming the bankruptcy process. Also keep in mind that a bankruptcy trustee has the power to revoke your recent payments and take the money back, so you might wind up with those debts unsettled again.
Also, remember that you will have to answer questions about your purchases and payments while under oath. You may benefit from asking yourself if you really want to explain a recent expense to a judge. Contemplating any further expenses carefully may help you avoid problems with your bankruptcy.