Being that we live in Texas and it is one of the states that has unlimited homestead protection, could I theoretically get a bunch of credit cards and get cash loans from them and use that to pay off my house? And then file bankruptcy? My house would be paid off and protected and my credit card debt wiped clean? This is just a theoretical question. Hahah. My house is already paid off for so don't yell bloody ethics at me please.
Well, it wouldn't necessarily be shown that way. I get 20 credit cards with $5000 limits. I get cash on all of them and put it in my checking account. I use my account to buy stuff here and there for a few months. I pay minimum monthly credit card payment. Then I make one huge payment to my mortgage. I guess they could track it down and claim I made a purchase of homestead. I guess I could also use my credit card to buy a bunch of crap and then Ebay it and then use the earnings to pay off my house. Harder to track down. Sheesh. I guess I might be giving some people ideas
After my recent lunch with a federal bankruptcy judge, I can tell you that a scam like this will be found out and you will not get away with it. Bankruptcy judges have a LOT of power, and you do not want to piss one off. Bankruptcy ain't no joke.
Yeah, I don't doubt it. I have a friend who filed bankruptcy less than two years ago and he's already able to buy a new house. Although at a slighter higher interest rate. And I have another friend who's mom has filed bannkruptcy twice and racked up bills of over $50,000 each time. Just kinda sucks you can get away with that so easily while some people struggle years on end to properly correct mistakes they made previously.
I think they'd prosecute you for fraud and put you in prison for a couple of years. But, I'm not a lawyer.
