It’s one of the most common — and understandable — questions we hear:
“If I’m filing bankruptcy because of credit card debt, why can’t I just use a credit card to pay my attorney?”
On the surface, it seems logical. But legally and ethically, it’s usually not that simple.
Let’s explain why.
📌 The Core Issue: Intent and Dischargeability
Bankruptcy eliminates debts you intended to repay but cannot afford.
If you charge attorney fees to a credit card while planning to file bankruptcy, that creates a serious legal problem.
Why?
Because the credit card company can argue:
You never intended to repay the charge.
That can turn the attorney fee into a non-dischargeable debt based on fraud.
⚖️ Credit Card Companies Can Challenge the Charge
Under bankruptcy law, creditors can file an adversary proceeding claiming:
- Fraud
- False pretenses
- Misrepresentation
If they argue you incurred the charge knowing you were about to file and not repay it, the court may:
- Declare that specific charge non-dischargeable
- Enter a judgment against you
- Leave you responsible for that balance after bankruptcy
No one wants that result.
🚩 Large or Recent Charges Get Scrutinized
Bankruptcy law already presumes certain recent credit card charges are suspicious.
For example:
- Luxury purchases over a certain amount within 90 days
- Cash advances within 70 days
Attorney fees charged immediately before filing can attract similar scrutiny.
Even if your intentions were not dishonest, the timing alone can trigger litigation.
📜 Ethical Rules for Attorneys
Bankruptcy attorneys also have ethical obligations.
Many attorneys will not accept credit cards for pre-bankruptcy fees because:
- It creates potential conflict of interest
- It may harm the client
- It can expose the attorney to clawback risk
In some cases, trustees have attempted to recover attorney fees paid by credit card as preferential or improper transfers.
💳 Is It Ever Allowed?
Sometimes — but it depends on:
- The chapter being filed
- Whether the card will be included in the bankruptcy
- The timing of the charge
- Local court practices
- The attorney’s policies
For example:
- If the card will NOT be included in the bankruptcy, it may be allowed.
- If you are filing Chapter 13, rules may differ.
- Some firms allow third-party payments instead.
But this must be analyzed carefully.
🏦 Why Chapter 7 Is Different
In Chapter 7:
- Attorney fees must generally be paid before filing.
- Once the case is filed, unpaid fees become dischargeable.
- Attorneys cannot ethically continue working on unpaid pre-petition fees.
That’s why Chapter 7 fees are typically paid upfront — and why credit card use creates risk.
💡 What Are Safer Payment Options?
Instead of using a credit card, many firms offer:
- Payment plans before filing
- Cash, debit, or certified funds
- Third-party payment (with proper disclosure)
- Bifurcated fee agreements (in some jurisdictions)
Each option must comply with bankruptcy rules.
📌 The Bottom Line
Using a credit card to pay a bankruptcy attorney can:
- Create fraud allegations
- Result in non-dischargeable debt
- Trigger litigation
- Complicate your case
The goal of bankruptcy is a clean fresh start.
Using a credit card to fund that process can undermine it.
If you’re concerned about affording attorney fees, talk openly with your attorney. There are often structured, legal ways to make it manageable — without creating additional problems.
