Creditor objections on credit cards

[btbeme]

First, let me preface by saying that I hope to avoid Ch. 13 by finding employment that will allow me to continue paying my bills. My business failed in May and I have been living off of savings and investments since then, but those wells are running dry soon.

I have tens of thousands in credit card debt. I am current on all but one card - that payment is now coming close to 30 days overdue. I have not used any cards except two (of my six) for much of anything in the last 2-3 months or so. One card, on which I am current, has been used for living expenses, etc for the last several months. The other has seen only minor charges, also for necessities (food, gas, etc). I have been using them exclusively to try to stretch my timeline for getting employed, and not for anything fancy.

Now, I am overdue on one card and due on the rest. The big question is whether I should continue to try to pay the minimum balance on each, including the overdue card, if it starting to appear that a Ch. 13 is looming. To stop using the existing cards is of course not even a question - I can stop, but doing so eats my cash reserves so that a Ch 13 is inevitable in a couple of months, three at the most, unless a job happens right now.

I am not trying to defraud the system; only pay basic expenses and stretch my timeline out. I can afford one more payment on the overdue and maybe one more on each of the others but that is it.

So - I know that spending more from this point forward is a big no-no. The question is whether I should pay the minimums another time or two if a BK is looming by Feb or March. I would hope, like anyone, to avoid creditor objections and the ensuing mess and stress of additional issues outside of the stress of a 13.

[frogger]

If you've been paying for necessities with the card, it shouldn't be any problem. I would probably quit paying the cards and pay for my necessities instead.

No creditor should be able to object to you for eating or having a roof over your head.

[WhattaMess]

I had close to $100,000 in CC debt and when I decided I was going to file I quit using them and also quit paying them for about three months. This allowed me to save up the money I had been paying per month for attorneys fees and put a little buffer in the bank for moving forward. There were no objections at all from the credit card companies at my 341 or at any other time.

[AngelinaCatHub]

If you've been paying for necessities with the card, it shouldn't be any problem. I would probably quit paying the cards and pay for my necessities instead.

No creditor should be able to object to you for eating or having a roof over your head.

Absolutely correct. In that you have been looking along with a flooded market of workers like you, and you talk of the "inevitable" I believe you are at or near that turning point we have all been at. REALIZATION! It is time to put things into perspective.

How much savings have you got? Your age? State?, what do you have that can be exempted in a more favored and simpler Chapter 7, rather than 13? After bk, you have to have a way to survive. Excess funds can be used to stock storable food items, commodities you use up (toilet paper and the like) advance payments on some utilities. If you did not pay any cards, can you do a 7 and start practicing a new life style now? It won't work if you are set up on a 13 and default for lack of expected income. 'Hub

[btbeme]

I am in Arizona, and I have heard that the trustees are pretty tough, and that they dig deep on large credit card writeoffs. Anyone with experience? Has 90 days been a good enough buffer, even without making any minimum payments, for these to pass?

My larger dilemma is a second home that I am a 1/4 owner in, along with my sisters. My mother lives in that home, and we are likely to have $150k equity in it. If we subtract the cost of selling that the courts allow (8% or so) that leaves us each with about $25k in equity. While I have no real issue paying that amount into a 13 over the course of 3-5 years, I would have an absolute nightmare on my hands if a Ch 7 trustee were to demand liquidation, buyout, etc because we simply could not do it. I cannot put that place at risk.

Getting a BPO to price the place is virtually impossible, since it is in a rural area in Montana where comparable properties simply have not been selling. I figure if I can get a BPO or two in a 13, the trustee is likely to accept them. In a 7, I hear that a trustee has the ability to go off the rails and try to substantiate a higher value which would really put me and my mother and sisters in a very bad spot.

I would rather do a 7, though stripping my $80k second mortgage in a 13 is also attractive.

[AngelinaCatHub]

Do you have three sisters or two? In other words does your Mother live there as a life estate, or does she have 1/4 interest. This type of title is USUALLY a 1/4 share undivided interest. This avoids probate in that if on dies, the other three have an undivided 1/3, then 1/2, etc..

I really doubt that the Trustee would make you sell to damage three other people. Also you do not have the power to sell it as they other three would have to be in agreement to sell. I think the Trustee would be most likely to abandon that asset.

Is AZ a homestead state and if so, is Mother homesteaded? 'Hub

[btbeme]

Three sisters, so us four kids on the title, but only me on the mortgage. Mom not on title, so I dont think she can homestead it (if she could, it would be for $150k allowance, which would solve a lot of problems). Title is held as undivided interest. Property has been in family for 55 years, but we built the house 4 years ago as Mom's retirement place and as a vacation home.

Overall, the thought of a 7 scares me because it seems the Trustee has a lot of power and I have little or no leverage. In a 13, it seems that there is more room for allowances, special circumstances, etc that can be argued and forgiven. Or am I wrong?

[walkthaplank]

You need to make some appointments to consult with BK lawyers in your area. While there are a lot of people here with knowledge, you have some pretty specific needs to address. A BK local attorney should have better working knowledge of your local BK district court. IF BK is inevitable, then you need to talk to some lawyers, they'll tell you to stop paying for everything but what you want to keep.