As a bankruptcy attorney, I am technically a Federal Debt Relief Agency, see 11 U.S.C. s 528 – Requirements for debt relief agencies. I cannot and do not advise you to go into debt to pay for your bankruptcy.
I have had clients ask me if they could put the bk on their credit cards and then go bankrupt on those cards. No. I have been asked if they could take out a payday loan, pay me, and then go bankrupt on the payday loan. No. That is awful.
Bankruptcy is about getting a fresh start from crushing debt, like medical bills, credit card debts that racked up after your business failed, income loss from a job loss or an hours reduction. It is not about defrauding creditors by racking up a bunch of debt quickly right before filing your case.
Now, does this prohibit you from borrowing money from Mom and Dad (or your kids) to file bankruptcy? No, lots of people do this. The problem is that once you are considering bankruptcy, you’ve gone to that well so many times that Mom and Dad are usually about tapped out.
I also get asked if a non-filing spouse can pay for the bk on their credit card, and I am okay with that. The non-filing spouse isn’t my client, isn’t incurring debt prior to a personal bankruptcy filing, and I don’t mind taking their money.
This is not legal advice. If you need help go to www.robertspaynelaw.com.