Cash advances taken shortly before filing bankruptcy can be problematic for the debtor. Some creditors will file an adversary proceeding if they believe the cash advance is nondischargeable. This type of adversary proceeding is basically a lawsuit against you to determine the dischargeability of the cash advance. It must be defended like any other lawsuit or a default judgment will be taken against you. This type of action is by no means a slam-dunk for the creditor. However, some cash advances are presumed nondischargeable. This basically makes it easier for the creditor to make their case. Therefore, it would be wise to mention cash advances you have taken to your bankruptcy attorney before he of she files your bankruptcy case.
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