need help anticipating an AP if i file BK (colorado)

[tacomeat]

Ive read thru some of the threads here and dont exactly see my same situation so just want to post it and get some advice/predictions/direction. i have not yet filed BK, but might be getting my first judgment summons soon. So i just got my first free BK consult the other day and this whole issue of AP came up which id never even heard of. now im wondering if all my debt wont be discharged...

i quit my job 5 years ago. soon after and still living at the same means with house and car payments, i incurred about $60k of credit card debt labeled as "balanced transfers" with the initial low rates where they transfered the money right into my bank account (not sure if that matters, but they seemed to be treated differently than "cash advances"). made the min payments for the next 3-4 years. was also periodically withdrawing from my 401k and IRA too.

then between june 2009 and sept 2009, i made dozens of charges, multiple per day, where i "stocked up" on $100-300 gift cards for food, gas, clothes, and visa gc's for things i would need in the future (probably totaled about $30,000). kept making the min payments on all my cards through sept, and then made some smaller payments over the next 2 months. i have not made any charges since sept 09, and i have not made any payments since october/november 2009.

(if you need any other info, let me know).

i can see how this activity would look fishy. i now have $99k in credit card debt over 6 cards (all of which i incurred while being out of work). but since 9 months have passed since my last purchase, will that time lag be the dictating factor in them NOT doing the AP, or will the fishiness of my transactions last year trump that?

thanks!

[frogger]

You need to remember that all those gift cards that you now have in your possession are assets.

[tacomeat]

You need to remember that all those gift cards that you now have in your possession are assets.

i have almost used them all up during the course of the last 10 months.

i sold some on ebay to get the cash (which i then used for rent, car payments, lottery, gambling, poker). i used some of the gift cards to offset my rent payment (to the friend i am renting a room from). and ive used the bulk of them for stuff - gas (i drive around a lot), groceries, and basically everything else. i wouldnt say ive lived a "luxurious" lifestyle but ive also eaten lots of meals out (at chain restaurants - not fancy ones), seen a lot of movies, gambled some as mentioned earlier (maybe 5,000 worth at most, though its not like keep track).

(if you've seen my other post on possibly claiming pysch problems as a defense, everything i have done and spent money on has been a means to escape reality or self-treat my depression and general hatred of life).

[catleg]

This is pretty standard stuff for people cycling down into bankruptcy/insolvency.
It almost reads like a check list of stuff many others have done before you.

As long as your filings with the court are honest and not concealing any hidden assets or income, you'll be fine.

Likewise, if you have any assets left, it is not improper to plan your trip into bankruptcy to conserve those assets for youself by placing them into exempt categories (like IRA's and 401k plans) or paying off student loans.

[tacomeat]

This is pretty standard stuff for people cycling down into bankruptcy/insolvency.
It almost reads like a check list of stuff many others have done before you.

As long as your filings with the court are honest and not concealing any hidden assets or income, you'll be fine.

Likewise, if you have any assets left, it is not improper to plan your trip into bankruptcy to conserve those assets for youself by placing them into exempt categories (like IRA's and 401k plans) or paying off student loans.

i get that in theory its pretty similar - i charged stuff and eventually got to a point where i couldnt pay it back. but is the manner in which i did it at all suspicious to make having an AP an eventuality? or - has enough time passed (8 months) where it wont matter how i specifically incurred those charges last year?

see, i had my first BK free consult the other day and the attny said they "generally" only look at the last 6 months, but they can "technically" do anything they want. so to him, having all of that activity would make an AP
quite possible. add on the fact that when the creditors find out i havent worked for 5 years - it makes it worse. but of course he also said its just as possible that it wont be challenged. (but, the fact that i have 2 out of 6 of the card balances referred to attorneys instead of collections - it makes me think they might be serious about pursuing things).

[catleg]

No one can tell you, guarantee you, that you won't have a problem. Least of all a lawyer.

But you're fine for a couple of reasons.

First, it was a long time ago. Credit card years are like dog years.

Second, when you're presumptively broke, as you are in bankruptcy, then most creditors will not pursue you. It is too risky for them, because if they lose they can be forced to pay your legal expenses for the suit, and even if they win, it's not clear how they're going to get any money out of you.

In the unlikely event they file an AP you can always settle with them.

If they sue you before you file BK it will be for breach of contract, not fraud.

See the other thread on these forums where someone was told by Chase that their case was a "classic case" of fraud, in a letter, but then Chase never followed through with the suit (AP).

[tacomeat]

If they sue you before you file BK it will be for breach of contract, not fraud.

See the other thread on these forums where someone was told by Chase that their case was a "classic case" of fraud, in a letter, but then Chase never followed through with the suit (AP).

thanks. actually the fraud idea was put in my head by my (old school pay-as-you-go) parents. so it did make me wonder if i would/could actually be criminally charged, along with not having the civil debt discharged. after reading several thread, that of course seems highly unlikely (one bullet dodged).

as for the "classic case" thread, i did read that. it was funny (and seemingly typical). but that person had (better) reasons for racking up the debt and didnt really do it all at once like i did. i dont really have reasons - other than out of survival.

this forum in the last 2 days has really helped me - at least find others going through the same thing. i still would like to put BK off as long as possible (maybe later this year) to further distance myself from my charging activity. but a judgment could force my hand. i think i have a process server who's come to my door a few times (i havent answered). maybe i should.

[keptdigging]

I am not one of the gurus here, but the longest I've ever heard of CC companies looking back is 13 months. If true, it doesn't mean you're in trouble now, just that after month 13 they wouldn't even contemplate an AP.

Most of the APs discussed here aren't by CC companies at all--they're from credit unions, local banks, and individuals with a grudge. The one guy with a gift card issue who was forced to settle on an AP had not made a single payment.

But your attorney is right--nothing guaranteed. But an AP is not cheap for the CC company (I wouldn't read anything into the way they're pursuing you now---that kind of collection activity is relatively cheap.)

You're probably ok. Waiting can't hurt if that's a possibility.

And me: I'm filing next month and my most recent BT will only be 9 months old and I didn't make a dime in 2009 sooo.... we'll see. Have been able to make plenty of payments though. (Much bigger debt though: about $200K unsecured.)

And for you and I both: if we dodge this, no more credit, right? I'm not in your shoes but no job I've ever had felt as much like slavery as having all this debt hanging over my head for years. And I worked grilling hamburgers at McDonald's as a teenager.

[tacomeat]

I am not one of the gurus here, but the longest I've ever heard of CC companies looking back is 13 months. If true, it doesn't mean you're in trouble now, just that after month 13 they wouldn't even contemplate an AP.

Most of the APs discussed here aren't by CC companies at all--they're from credit unions, local banks, and individuals with a grudge. The one guy with a gift card issue who was forced to settle on an AP had not made a single payment.

But your attorney is right--nothing guaranteed. But an AP is not cheap for the CC company (I wouldn't read anything into the way they're pursuing you now---that kind of collection activity is relatively cheap.)

You're probably ok. Waiting can't hurt if that's a possibility.

And me: I'm filing next month and my most recent BT will only be 9 months old and I didn't make a dime in 2009 sooo.... we'll see. Have been able to make plenty of payments though. (Much bigger debt though: about $200K unsecured.)

And for you and I both: if we dodge this, no more credit, right? I'm not in your shoes but no job I've ever had felt as much like slavery as having all this debt hanging over my head for years. And I worked grilling hamburgers at McDonald's as a teenager.

funny. i used to work fast food in high school too . sadly (or not) it was my favorite job of all that ive had and that was really min wage - like $3.50..

as for me, i doubt i can get access to any new credit if i get through this unscathed. i would imagine i'd need to get a job first, lol. if i can, i'll definitely work to build my credit back up and live within my means. me, im a slave to my pysch problems/emotions. probably need to figure out a way to deal with that crap first and foremost. i probably couldnt even hold down a job for long, otherwise.

but all of this info/insight is good to know. i met with another attny on a consult and he seemed to be much more helpful and reassuring about my possible judgment hearing thats forthcoming. it seems like i might be untouchable there, which would allow me to prolong filing BK later this year, which would put me in that 13 month window. it definitely seems like the longer i wait, the better chance of no AP.

but looking back, i probably should have at least made a few more payments like you did, but i wasnt thinking that far ahead, nor crafting some diabolical BK filing scenario. i just decided at the time it was more in my interest to not keep throwing money away on payments . anyway, i bet your situation is better than mine. at the very least, you seem to be in a better frame of mind about it than i am. but i wish you the best of luck and will be seeing how your progress goes.

[keptdigging]

I re-read the thread and thought it might be helpful to clarify the f-word: fraud.

It gets used a lot... with very different legal meanings.

1. In the context here, meaning "debt you didn't mean to pay back" the risk is simply a civil one, that the specific debt will be declared non-dischargeable.

2. There is also "bankruptcy fraud" which is a criminal offense: but that refers to fraud (lying) on your filing.

3. I guess there is also the crime of (non-bankruptcy) fraud. I'm not a lawyer and don't know what the elements of that crime are. But apparently it requires much more than simply maxing out your credit cards and not paying...