20/20 Hindsight and Misrepresented Income

[Peeps]

So I'm kicking around an issue, looking backwards, and wondering if it'll bite me in the rumpage. I'm worried it'll look suspicious to creditors and could use some input from others who may have insight...

I applied for several CCs in mid-2008. I was out of work at the time (left my job mid-2007) but fully believed I could get a job anytime I wanted. My skills are in a niche of the healthcare industry and the demand for people with experience remains very high. So even though I wasn't working, I didn't think twice about putting my previous $100k/yr income on the CC applications. After all, I was going to get a better job and it would probably pay even more than what I was putting on the apps. But the problem was, I had some mental health issues that were undiagnosed at the time. Although my skills were great, my ability to cope in the workplace... not so great. I really didn't see that at the time because I was, put bluntly, a little bit nuts. And I'm not working to this day. I do have a paper trail to prove the mental craziness and when the diagnoses were made.

Based on the income I said I had on the apps (none of the CC companies verified the income) I ended up with:

Cap 1: $10k
Paypal (GE Bank): $3k
Wells Fargo: $3k
Discover: $9.5k but I requested incr to $10k for bal transfer
Citi: $5k but they raised it to $6k w/o any request
Barclays: $12k but they raised it to $14k w/o any request


And of course they're now all max'd out, along with several others that I had prior to 2008. I made unfailing minimum payments on everything through October 2010.

I'm considering a Ch 7 BK and am well under the means. The only assets I have seem to fit into the allowable exemptions for my state. And my only income right now is from SSDI. Got $43k in backpay from SSDI in September this year but I haven't wanted to touch it because I just don't know how to pay $63k of debt with it and now I kind of want to protect it. It seems pretty straightforward, yet I'm mortified about moving ahead because I have some fears (like getting sued for fraud) that I just can't seem to get past.

So, given the 20/20 hindsight, how likely will the CCs be to come after me for fraud if I file for BK? It really wasn't the intent at the time, but I can see how it might look like it now. I know an attorney can advise me, and I do intend to talk with a few, but would still welcome any advice or insight from the forum. Thanks in advance.

jae

[tobee43]

peeps!!!!!!!!!

it's the BANKS job to check it out the info you provided them.....you're feeling guilty and no need to

it was THEIR responsibility to make certain your application was correct...let me ask you this...if you were to apply today to wells fargo...you think they wouldn't check under your bed to make sure you were not hiding the truth from them???....well...OK...maybe TODAY they would...but the point here is the banks were passing out money to everyone and their mothers and their mothers mothers .......money was FREE or cheap.

they aren't going back to 2008....believe me...they don't care how you got the cards...just what you sent in the past 90 days prior to filing.

[Peeps]

Too funny... y'know, considering how often they've been calling me (thank heavens for Google Voice) I think maybe they SHOULD just move in under my bed. Easier access for them. I could move some things around and make room for a few other creditors and they could have a nice little party down there.

I suppose it's a bit crazy (go figure) to worry about the apps in 2008 and yet I still do. I mean, Fraud is a scary word!

[tobee43]

Too funny... y'know, considering how often they've been calling me (thank heavens for Google Voice) I think maybe they SHOULD just move in under my bed. Easier access for them. I could move some things around and make room for a few other creditors and they could have a nice little party down there.

I suppose it's a bit crazy (go figure) to worry about the apps in 2008 and yet I still do. I mean, Fraud is a scary word!

as it's meant to be.......but the fraud here is the abuse prior to filing your bankruptcy...and it's a fairly difficult burden to prove on the side of the creditor unless 60 days before you filed you took a vaca to the islands and had a bill from the island bar for 2k....and you went to the jewelery shop and perfume store and spent another 5k there...NOW that's a reason to worry about fraud...

and under your bed is too good for them...just stick them under the trash bag in the kitchen....

[Jacey]

I have a question about Google voice...if your creditors have your home phone and your cell #, how can you use google voice to avoid calls?

[BKHELP138]

WHat kind of cell phone do you have ? You can download apps for both the Iphone and droid based phones which let you block numbers. The apps are free and work great. They send the # you select to voice mail every time they call.

[Peeps]

I went to the websites of my creditors and took out my home/cell numbers. Replaced them with the Google Voice number. It helped but it wasn't totally effective. Amex is calling my home number a couple of times a day even though my web profile definitely has the Google number. They must keep old numbers on file somewhere. Or maybe they're just idiots and can't figure out that they're calling an old number. Hard to say.

I do like the Google Voice thing, though. It even gives you the option of recording incoming phone conversations which is a nice feature if the calls start getting ugly. Haven't gotten there yet, but it sounds like it is a definite possibility moving forward. If I continue to get calls on my home or cell numbers, I think I might tell them "she moved out, here's her new number..." and then give them the Google Voice number. Maybe that could work in your situation, too.

[biotechsolution]

your big problem is there is no way you're going to be able to protect the 43K unless you wait a year to file to spend it down.

[debee]

your big problem is there is no way you're going to be able to protect the 43K unless you wait a year to file to spend it down.

ya, i second that.

[tobee43]

I have a question about Google voice...if your creditors have your home phone and your cell #, how can you use google voice to avoid calls?

also depending on your home phone and your cell company, you can put "BLOCKS" on the creditors numbers and or exchange the pickup to google voice mail. i don't know how to "set" it up, but i have known many that have done it...we just used the blocks and that was it.

[tobee43]

your big problem is there is no way you're going to be able to protect the 43K unless you wait a year to file to spend it down.

ssi is exempt income...so they can't touch it...

actually in some districts...ui is exempt as well and protected under the ss act...so if peeps money was from ssdi...they are not entitled to that money.

however, if someone knows were ss is not exempt please chime in..

[Peeps]

Pretty sure SSDI is exempt in CO, since we use the federal statute for social security and disability. I still think it'll garner some attention, though, which is not good.

The same issue was recently tested up in MN when a BK trustee went after a lump sum SSDI payment of a BKer. The court agreed with the trustee but the decision was later reversed on appeal... in large part to the interpretation of the federal statute. Anyway, I'm not quite ready to trust the whole thing and am still doing lots of research.

[tobee43]

Pretty sure SSDI is exempt in CO, since we use the federal statute for social security and disability. I still think it'll garner some attention, though, which is not good.

The same issue was recently tested up in MN when a BK trustee went after a lump sum SSDI payment of a BKer. The court agreed with the trustee but the decision was later reversed on appeal... in large part to the interpretation of the federal statute. Anyway, I'm not quite ready to trust the whole thing and am still doing lots of research.

when was the most current appeal?? one would be hopeful, that decision could or would be cited in your case...i really understand about not wanting to trust it all, even with researching it's difficult. one finds all these cases and they are point on to the situation..they are cited and the judge still turns a blind side ...even to the written law. it's a tough one...but really, i truly believe, and want to believe, you will be fine with the ssdi money. at least i really hope you are!

[Peeps]

Carpenter v. Ries, which ultimately landed in the Eighth Circuit Court of Appeals was decided in Aug 2010. I wouldn't know a case number if it jumped up and bit me on the butt, but I have a feeling I'll know it soon enough because it citing it would be important, I agree. I hope others on the forum can make use of it too if it is applicable to their cases.

[debee]

Carpenter v. Ries, which ultimately landed in the Eighth Circuit Court of Appeals was decided in Aug 2010.

In that case, Carpenter was trying to protect his lump sum using federal exemptions. He was in the 8th circuit. You're in the 10th and you can use Colorado Revised Statute 26-2-131 which contains specific language exempting your SSDI from the operation of any bankruptcy law.

When I saw the amount of cash you were sitting on, I thought you would have a definite problem too. Now I'm not so sure. I would run it by a few local lawyers in free consults and if they all give you the thumbs up, I'd trust that.