Can someone answer a few questions for a novice?

[rpg1977]

My husband and I have decided to jump off the credit card debt cycle..robbing Peter to pay Paul, and file Ch. 13. I believe its the only option for us.

We have never had a late payment on anything in the 13 years we have been married. We are current on our house. Have no car payments or student loan payments. All of our debt we are filing for is unsecured. $100k in credit cards and $20k in unsecured loans/lines of credit.

I understand the basics of Chapter 13. There are some parts Im confused about. We have our 1st appt with a lawyer in 10 days. We went ahead and scheduled our pre-filing counseling for Tuesday. I bought and read "Chapter 13 Bankruptcy: Keep Your Property & Repay Debts Over Time" by Robin Leonard J.D. and Stephen Elias Attorney. I feel I have a good understanding, but have more questions.

1) If I already know I am filing, can I go ahead and stop paying these credit cards? Im afraid to, but sort of feel that I would just be throwing money away that I could save to actually pay for the fees and filing cost. Im so nervous to do it, but I never really had the money to pay anyway..I would just take a cash advance from one to pay the other.

2) Since I did do recent cash advances and my bank used my cc as overdraft protection as recently as May 28, will they still let me file, even though I did not use the cash advance/overdraft from the credit card for luxury items? Or will they make me wait 90 days?

3) If I have to wait 90 days, I will not pay the cc bills. Won't they start calling me? Should I answer the phone or just ignore it? Im so nervous about this part.

4) Will the lawyer give us an idea of what our payments will be at the first meeting (Im bringing in all the right paycheck stubs and tax returns and list of our monthly expenses).

5) Do you get to schedule the 341 meeting or do they pretty much tell you when it is. Do you get to reschedule if you have to work or something?

6) What happens if you get an unexpected bonus at work? My husband is supposed to get quarterly bonuses, but they are never guaranteed. My job is "as needed". Sometimes I work 30 hrs a week, sometimes 0. Will they count my income or just his? His job is steady and gets the same pay every month.

7) Since I don't have mortgage issues (I have always been current on my mortgage and will continue to do so), is there any reason to believe that my plan won't be confirmed? And if its not confirmed, then what?

7) I have heard that credit card companies typically don't put in a claim. Where does the money go if none of them do? I know I still have to keep paying. I guess the process seems a bit backward to me. If I am already making payments way before the confirmation hearing, what happens to the money I pay?

8) Do we HAVE to do payroll deduction in Ohio? We would much rather pay directly and leave my husband's job out of the loop. He does not want them knowing about it.

9) Will I have enough money for the kids to do their extra sports things at school? I mean, Im not asking for blowing money at the mall, but things like their cheerleading and girl scouts that we have to pay for uniforms and fees and things like that?

10) What about if something HUGE happens, like something with the house that needs repaired or a car breaks down? I normally rely on credit cards for those things and am so nervous to have that blanket pulled from under me.

11) What happens in my husband loses his job due to layoffs and the economy?

12) I know I have to pay the filing fee, but how do the attorneys normally collect their fees? Do I have to pay upfront or do they allow for partial payments or roll it into the filing?

Im sure Ill have more questions, but those are all I have for now.

[liz417]

]

My husband and I have decided to jump off the credit card debt cycle..robbing Peter to pay Paul, and file Ch. 13. I believe its the only option for us.I think we've all been there when it comes to robbing peter to pay paul

We have never had a late payment on anything in the 13 years we have been married. We are current on our house. Have no car payments or student loan payments. All of our debt we are filing for is unsecured. $100k in credit cards and $20k in unsecured loans/lines of credit.

I understand the basics of Chapter 13. There are some parts Im confused about. We have our 1st appt with a lawyer in 10 days. We went ahead and scheduled our pre-filing counseling for Tuesday. I bought and read "Chapter 13 Bankruptcy: Keep Your Property & Repay Debts Over Time" by Robin Leonard J.D. and Stephen Elias Attorney. I feel I have a good understanding, but have more questions.Okay, 1st of all, are you trying to protect some assets, is that why you are filing a ch 13? Are you over the median for your state (not that this matters)? Do you have equity in your home or cars?

1) If I already know I am filing, can I go ahead and stop paying these credit cards? Im afraid to, but sort of feel that I would just be throwing money away that I could save to actually pay for the fees and filing cost. Im so nervous to do it, but I never really had the money to pay anyway..I would just take a cash advance from one to pay the other.I was told once you realize that you are filing, stop charging credit! Save your $$ for an attorney, etc.

2) Since I did do recent cash advances and my bank used my cc as overdraft protection as recently as May 28, will they still let me file, even though I did not use the cash advance/overdraft from the credit card for luxury items? Or will they make me wait 90 days?hmm, don't know if this is really considered a "cash advance"....someone will come along and know more

3) If I have to wait 90 days, I will not pay the cc bills. Won't they start calling me? Should I answer the phone or just ignore it? Im so nervous about this part.Yes, they will hound you. Hopefully you would have retained an attorney and able to refer calls to him/her (ask first)! If not, do not ignore the calls, I liked picking up the phone every once in awhile to let them know that I am still alive (especially when the debt is with a new collection agency), that way they are not calling my family, friend and neighbors!

4) Will the lawyer give us an idea of what our payments will be at the first meeting (Im bringing in all the right paycheck stubs and tax returns and list of our monthly expenses).Okay, I would set up an appt with at least 3-4 attorneys before you decide on one (I consulted with 6). You can also do the means test at www.legalconsumer.com and see what your appox. payment will be.

5) Do you get to schedule the 341 meeting or do they pretty much tell you when it is. Do you get to reschedule if you have to work or something?No, the 341 date is given to you when you file. It is really important for you to make this meeting or the Trustee can dismiss your case.

6) What happens if you get an unexpected bonus at work? My husband is supposed to get quarterly bonuses, but they are never guaranteed. My job is "as needed". Sometimes I work 30 hrs a week, sometimes 0. Will they count my income or just his? His job is steady and gets the same pay every month.You can plan the best time to file with your attorney. They look back and average out the last 6 months, so it is important to take the "lowest 6 months" of pay and file at that time.

7) Since I don't have mortgage issues (I have always been current on my mortgage and will continue to do so), is there any reason to believe that my plan won't be confirmed? And if its not confirmed, then what?Since you are current, you can pay your mortgage outside the plan. I don't see why this wouldn't be "confirmed"?

7) I have heard that credit card companies typically don't put in a claim. Where does the money go if none of them do? I know I still have to keep paying. I guess the process seems a bit backward to me. If I am already making payments way before the confirmation hearing, what happens to the money I pay?I haven't read that, but sometimes a single credit card company doesn't file a claim, that doesn't lower you payments, it just gives more to the other creditors. I think I've only read one old post where NONE of her creditors filed a claim, she was done with you ch 13!

8) Do we HAVE to do payroll deduction in Ohio? We would much rather pay directly and leave my husband's job out of the loop. He does not want them knowing about it.Sorry, don't know.

9) Will I have enough money for the kids to do their extra sports things at school? I mean, Im not asking for blowing money at the mall, but things like their cheerleading and girl scouts that we have to pay for uniforms and fees and things like that?Your attorney will know what the trustee looks for, some posters here were able to put in an expense for entertainment, while others here were allowed. Also, it is very important to get an attorney to write a good repayment plan for you with a "little wiggle room", otherwise you will be expected to live on a budget with all you disposable income going to your repayment plan. For those unexpected expenses, you will have to cut in other areas of your budget.

10) What about if something HUGE happens, like something with the house that needs repaired or a car breaks down? I normally rely on credit cards for those things and am so nervous to have that blanket pulled from under me.Again, see above.

11) What happens in my husband loses his job due to layoffs and the economy?You may qualify to convert to a ch 7 and/or amend your payments.

12) I know I have to pay the filing fee, but how do the attorneys normally collect their fees? Do I have to pay upfront or do they allow for partial payments or roll it into the filing?This varies, some attorneys will "roll" their fees into the plans and some want the fees up front. It is important to ask this question at your free consultation.

Im sure Ill have more questions, but those are all I have for now.

Welcome to this forum, I would spend some extra time reading other posts. There are tons of wonderful people here with lots of experience!

Good Luck

[eddiep]

rpg
these are some great questions, you have done your homework and it shows, makes sure you take a list of questions when you interview the lawyer(s). When looking for an attorney you may want one that only does bankruptcy cases and will attend the 341 if that is important to you.

[tkharvey]

Yes, I know it's hard but stop paying your cc's immediately. You are just throwing your money right out the window. Yes, they will hound you. What we did was cancel our landline and just use our cell phone. If and when they do call, we just referred them to our attorney, giving them his name and number. My house is much more peaceful without the phone, anyway. You are not alone, as many of us have NEVER been late on a payment so this is so unnatural for us to stop paying our bills. Unfortunately, we have no other choice, as do you, I'm sure. The hardest part has been only paying cash for things....I don't have the crutch of using a credit card (haven't used one in nearly six months). I know I'm better off paying cash and that one day, I will come out ahead once this BK is behind us. It just really makes you PLAN for things you need and want. If we don't have the money to pay for it cash, we don't buy it.....what a concept! You have some good questions and sound like you will do fine....just address these questions to your attorney when you meet with him. In the meantime, this forum is a great way to educate yourself as I did, since I never realy knew much about BK. This has been a learning experience for us all. Good luck!

[rrockinggramma]

while it is true that you are "throwing" away the money paying the credit cards prior to filing, your situation is different than many others. You probably have a good credit score, or decent one at least. And in BK, the recommendation is not to worry about your score because BK will tank it by 100 points immediately. However in your case, I would try to stay as current as you can right up until 30 days before filing. If you can pay everything and then within the 30 day time frame for paying again, file.

The cc companies will be "shocked" and want to know why etc and your score will drop. BUT you will avoid the "charge off's" and the late pays on your credit report prior to filing. All your credit report will say is Included in Wage Earner Plan with perfect payment history prior to filing. That will really help boost your score once you are discharged.

Now some here will say forget the score and that is true for those of us whose score was so bad prior to filing that BK helped it, not hurt it, but with the White VS Experian law now in effect, companies cannot legally report any chargeoffs or late pays once a BK is filed. The bureaus can only notate IIB and then either discharged or dismissed.

You will recover much more quickly from your filing if you can do this. GL

[ccfriend]

while it is true that you are "throwing" away the money paying the credit cards prior to filing, your situation is different than many others. You probably have a good credit score, or decent one at least. And in BK, the recommendation is not to worry about your score because BK will tank it by 100 points immediately. However in your case, I would try to stay as current as you can right up until 30 days before filing. If you can pay everything and then within the 30 day time frame for paying again, file.

The cc companies will be "shocked" and want to know why etc and your score will drop. BUT you will avoid the "charge off's" and the late pays on your credit report prior to filing. All your credit report will say is Included in Wage Earner Plan with perfect payment history prior to filing. That will really help boost your score once you are discharged.

Now some here will say forget the score and that is true for those of us whose score was so bad prior to filing that BK helped it, not hurt it, but with the White VS Experian law now in effect, companies cannot legally report any chargeoffs or late pays once a BK is filed. The bureaus can only notate IIB and then either discharged or dismissed.

You will recover much more quickly from your filing if you can do this. GL

I agree with this! I wasn't late on anything either. I had to file like you...robbing Peter to pay Paul. I paid everything up until the day I filed and my credit score is still pretty high even with the bk. I filed last June!

[woeisme]

But if the original poster is paying everything on time by using one card to pay another, she really shouldn't be paying on her cards up to the filing date since it's going to really up her odds of having creditors claim fraudulent charges because these transfers are going to be hounding her. Ask MajorMike whether or not CH 13 filers can have problems with creditors if you use your cards within the 70-day window, he had a real horror story on his hands with AMEX doing this.

Can I ask where in Ohio you are from? I am in the Southern District, and the trustee here is really reasonable. We've been able to do some of those things you were asking about, keeping our kids in sports, lessons, etc.

[rpg1977]

I was thinking the same thing..the reason Im in the mess (well, one of them) is because I tried keeping my credit clean by never being late, but it essentially just made my hole deeper and deeper every month.

Im in the Cincinnati area. Im so worried about the payments. We make excellent money on paper, but it seems like we are left with nothing and in the red every single month.

[woeisme]

I filed in Columbus, and the trustee here was really reasonable, our attorney worked our plan to give us some "wiggle room" (I wouldn't say she 'padded' expenses, but definitely rounded things up or used IRS #'s if our actual expenses were on the low side, brainstormed with us to think of areas we might be forgetting about, etc.) and the trustee was totally fine with it, I guess he has one of the highest rates of completion of CH 13 in the country since he doesn't try to stick it to the filers near as bad as some I've read about on here. I've found filing to be a big relief (we're 22 months into it now) and it was the best decision I ever made, financially speaking.

[woeisme]

I also had never had a late payment in my life, but didn't pay the 3 months before we filed so we could use the $ for the lawyers fees and filing costs (we rolled about 1/2 the $4000 fee into the plan, and paid half up-front). I considered these 3 months as "practice" learning to live on a cash only basis. It was rough for me at first, but now I rarely think twice about it. The one thing I would advise you to do is to assess whether or not your cars will make it through a CH 13 (5 years). I just put in a motion to modify my plan payments by $400 so we could get a car since both of ours were junkers when we started and now are really reaching the end of their usefulness.