Holiday Credit Card Charges Before Bankruptcy in Florida: The 90-Day Presumption

Every January, Florida bankruptcy attorneys meet people who decided in October that they would file after the holidays, and who spent November and December using the cards they intended to discharge. The reasoning is understandable. The debt is going away anyway, the children expect gifts, and the balance is already beyond repair. The Bankruptcy Code anticipated exactly that reasoning, and it contains a rule that turns recent charges into debts that survive the discharge. If you are thinking about a Chapter 7 in the first quarter of 2027, this is the rule to understand before Thanksgiving, not after.

The general rule: credit card debt is dischargeable

Start with the baseline. Ordinary credit card debt is unsecured consumer debt, and a Chapter 7 discharge wipes it out. Nothing in the Code makes a card balance nondischargeable because it is large, because it was used for things you did not need, or because you knew you were in trouble when you used it. The exceptions in 11 U.S.C. § 523(a) are specific, and the one that matters here is § 523(a)(2), which covers debts obtained by false pretenses, a false representation, or actual fraud.

A creditor who wants to keep a card balance out of the discharge on fraud grounds has to file an adversary proceeding in the bankruptcy case and prove it. That is expensive, and most card issuers do not bother for ordinary balances. The presumption in § 523(a)(2)(C) changes the economics.

What the presumption says

Section 523(a)(2)(C)(i) creates two presumptions of nondischargeability. The dollar amounts are adjusted every three years under 11 U.S.C. § 104, and the figures below took effect April 1, 2025 and run until the next adjustment on April 1, 2028.

Luxury goods or services. Consumer debts owed to a single creditor, aggregating more than $900, for luxury goods or services, incurred within 90 days before the order for relief, are presumed nondischargeable. In a voluntary case the order for relief is the petition date, so the window is the 90 days before you file.

Cash advances. Cash advances aggregating more than $1,250 that are extensions of consumer credit under an open-end credit plan, obtained within 70 days before the order for relief, are presumed nondischargeable.

The statute then defines its terms by exclusion. Under § 523(a)(2)(C)(ii)(II), "luxury goods or services" does not include goods or services reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor. Groceries, prescriptions, utilities, gasoline to get to work, and a child's winter coat are not luxury goods, whatever card they went on.

What a presumption does and does not do

A presumption is not a verdict. It shifts the burden. Normally the creditor must prove fraud. Within the presumption, the creditor files the adversary proceeding, shows the charges fit the dollar and time thresholds, and the burden moves to you to prove the charges were not fraudulent, which in practice means showing that you intended to pay when you made them or that the purchases were necessities.

Two consequences follow. First, the presumption does not make the charges nondischargeable automatically. If no creditor files an adversary proceeding by the deadline, which is 60 days after the first date set for the meeting of creditors, the debt is discharged with everything else. Second, the presumption makes it cheap for a creditor to file, because it no longer has to build a fraud case from scratch. Card issuers run the dates on every account in a new case, and a December shopping spree followed by a February petition is exactly the pattern their software flags.

Charges outside the presumption are not safe either

The 90-day and 70-day windows define the presumption, not the outer limit of the fraud exception. A creditor can still bring an ordinary § 523(a)(2)(A) claim on charges made 120 days before filing. It just has to prove the case without the presumption. The factors courts weigh are familiar: how close the charges were to the filing, whether you had consulted a bankruptcy attorney before making them, whether you were employed and able to pay, whether the charges were unusual compared with your history, whether you made more than the minimum payment afterward, and whether the purchases were the kind a person planning to pay would make.

A person who charges $400 a month for years and charges $450 in December is not a fraud case. A person who has not used a card in a year, pulls it out in December for $3,000 in electronics, makes no payment, and files in February has a problem whether or not the $900 line is crossed.

The Florida-specific wrinkle: what you can keep

Florida's personal property exemptions are among the narrowest in the country. Under Article X, section 4 of the Florida Constitution, personal property is exempt up to $1,000, and under section 222.25(4) of the Florida Statutes a filer who does not claim the homestead exemption gets an additional $4,000 wildcard. A $2,500 television bought on a store card in December is not only a presumption problem, it is an asset the Chapter 7 trustee may be entitled to sell. The charges stay with you and the goods may not.

If the charges have already been made

Most people reading this in late October have not yet done the thing. Some have. The options depend on timing.

Wait. The presumption expires. Charges made on November 15 fall outside the 90-day window if the petition is filed after February 13. Cash advances fall outside the 70-day window sooner. Waiting does not erase the ordinary fraud exception, but it removes the burden shift, and most issuers do not file without it. The cost of waiting is whatever the creditors do in the meantime, which is why the decision belongs in a consultation and not on a calendar.

Pay down the charges. Payments made in the ordinary course after the purchase are evidence of intent to pay. They also reduce the amount at issue. A payment that brings the recent charges to one creditor under $900 takes that creditor outside the presumption entirely. Be aware that payments to a creditor within 90 days of filing can be preferences under 11 U.S.C. § 547, though the consumer threshold of $600 in § 547(c)(8) and the small size of most card payments keep that from mattering in a typical case.

Document necessity. If the December charges were tires, a water heater, a child's medication, or the electric bill, keep the receipts. Necessities are outside the definition of luxury goods, and a creditor's lawyer who sees the receipts before filing an adversary proceeding will usually not file one.

Consider Chapter 13. The § 523(a)(2) exception applies in Chapter 7 and, under 11 U.S.C. § 1328(a)(2), in Chapter 13 as well. But in a Chapter 13 the recent charges are paid through the plan on the same footing as the other unsecured claims, and the practical incentive for a creditor to litigate is lower.

What not to do

Do not return the goods for store credit and then charge them again on a different card. Do not take a cash advance to pay the attorney. Do not transfer the balance to a new card, which creates a fresh debt to a new creditor with a fresh date. And do not stop paying entirely while continuing to use the card; a card used after the last payment is the clearest signal a creditor's lawyer can ask for. Our post on credit card debt in a Florida bankruptcy covers the broader treatment of card balances, and buy now, pay later debt covers the installment apps that have replaced store cards for many holiday purchases.

Frequently asked questions

Does the $900 apply per card or per creditor? Per creditor. Two cards from the same bank are aggregated. Two cards from different banks are counted separately.

Are gift cards luxury goods? A gift card is a purchase of credit at a retailer, and the courts that have addressed it treat it the way they treat the underlying goods. A $200 grocery gift card for an elderly parent is a necessity. A $1,000 department store card given as a present is not.

I charged holiday travel to see family. Is that luxury? Travel is the classic example of a service the statute reaches. Travel for a funeral or to care for a sick parent has been treated differently by some courts, but you should expect to have to explain it.

What if I used the card for business expenses? The presumption applies to consumer debts. Business charges are outside it, though a creditor can still bring an ordinary fraud claim.

Before deciding whether to file in the first quarter or wait for the windows to run, the free Florida means test calculator takes about three minutes and shows whether Chapter 7 is realistic before you pay for a consultation.