Dear Bankruptcy Adviser,
My grandmother filed for and was granted bankruptcy after her children helped her run up credit card debt of $18,000. Since she was granted bankruptcy, she has gotten three more credit cards. She is illiterate and unable to read, so I know that one of her kids is helping her fill out the papers; they are also helping her run up the bill.

Can my grandmother go to jail for committing credit card fraud after filing bankruptcy? My grandmother is a simple-minded person on a fixed income. She feels that she is helping her kids and it is not against the law; otherwise the credit card companies wouldn't give her a card. What should we do?
-- Barbara

Dear Barbara,
You are right to be concerned for your grandmother. I can understand her desire to help her children, but based on the facts given, it appears that she may have lied about her income on a credit card application, and if that is true, then yes, she has committed fraud. People who have recently declared bankruptcy often receive credit card offers, but of course, the offers are not guaranteed and low-income applicants will usually be rejected. Most creditors will not approve an applicant on a fixed income like Social Security.

In most fraud cases, the applicant includes her income and the income of others living in her home (or someone she knows), and the credit card company approves the application based in part on the higher (fraudulent) income. Lying on a credit card application is definitely against the law.

As for whether your grandmother can go to jail for committing credit card fraud, you may be surprised to learn that many people never go to jail for this kind of fraud. In your grandmother's case, a creditor would probably decide the amount of debt owed was not worth the expense of suing a grandmother on a fixed income. Also, while a judge would likely conclude that your grandmother did commit fraud, creditors usually want to get paid rather than put someone in jail. In jail, your grandmother would earn about $1 per day, and that would never pay off the balance!