How to handle business expenses

[marko]

The biggest hurdle that I see in initially going through this process, is my work expenses. I travel on a weekly basis, flying, renting cars, staying in hotels, and eating out on the road. I also have to put training expenses on my card, such as putting trainees up in hotels. We have to use our personal cc, with the company reimbursing us later. It takes 3 to 4 weeks to get back the expenses from my company. I do not think that a debit card will work with rental car companies, and I know that hotels are placing holds in debit cards to the tune of a couple hundred extra dollars per stay. My expenses range from $3000 - $6000 per month.

I am wondering if anyone has had a similar experience, and can provide some direction. I could pay down one of my cc's now, with the expense reimbursement that is coming in, if I knew that I could reaffirm the debt. My fear is that they will cancel it, or lower my balance, as most of my current cc's have already done.

My wife is not planning to file with me, as we believe that we can pay her debt down. Her cards are maxed, but her balances aren't nearly as high as mine. Would it be a viable solution for me to pay one of her cc's down, and put my name on her card as a user after I have filed? Any and all suggestions are welcome!

I apologie in advance if this has been posted. I read through about 40 of the pages and did not see anything along these lines. I am planning to meet with an attorney on Monday, and wanted to go into the meeting with some ideas.

[AngelinaCatHub]

I advise if you are planning on acting soon, that you make NO changes in any card. Consider a prepaid credit card for as soon as you file, you may be cut off. Remember the automatic stay goes two ways. Paying once card over another presents another problem of priority payments. When in 7 or 13, all creditors get paid evenly. 'Hub

[marko]

Prepaid card

By prepaid card, are you referencing the gift cards at the supermarket, or a secured card, or other? Would it create a problem if I used a large sum of money that would have been used to a pay a months worth of business expenses to a cc, to secure such a card?

[HakunaMatata]

It's likely all major lenders will close your accounts. Very few cards survive BK. I had numerous zero balance accounts which were closed.

Submitting a large payment to one lender while neglecting to pay other lenders is deemed "preferential". This doesn't have a directly adverse effect on you. Your Trustee will likely regain the funds and engage in equitable distribution.

I believe Hub is referring to a prepaid debit card. AAA has a Visa TravelMoney card with a loading limit of $9999. If your wife is able to pay down her balances, she can make you an authorized user on one of her cards.

[debtinohio]

With so much traveling I think it's BS to not give you a company card. I'm fortunate in that regard.

I second the opionion of a secured credit card where you can deposit like $5000.

[marko]

Thank you all for your post! This board is great.

I can put away $3,000 or $4,000 prior to filing in expense check money that I get back from my employer, the month prior to filing. Is the trustee going to have a problem with this? Any suggestions in this regard.

[HakunaMatata]

Cash reserves can be tricky unless they can be protected by an exemption (I didn't use my homestead exemption and I was able to exempt cash). Some States don't have large cash exemptions. The Trustee commonly asks for a bank statement reflecting the filing date (keep this in mind if you expect to have cash prior to filing). This is something you should discuss with an attorney.

There is a difference between a secured credit card and a prepaid debit card. You want to be mindful of fees/interest rates when determining which is best suited for you. Also...for clarification...your wife can add you as an authorized user on her cards at any time (provided her lender permits such). She doesn't have to decrease her outstanding balances to add you. My thinking was...if she is able to free up available credit...adding you as an authorized user would satisfy your need for business travel/expenses.

[marko]

Using my wife's card seems to be the best solution, however, in order for it to work, I would need to put pay her card down some, so that I had enough credit to last me for a few weeks. Do you think that paying down a few thousand on her card, would be viewed the same by the trustee, as paying down money on one of my cards?

[lrprn]

Do you think that paying down a few thousand on her card, would be viewed the same by the trustee, as paying down money on one of my cards?

Paying down just this one card opens you up for your trustee stating it's a preference to one creditor. It's possible that the trustee will go after the cc company to get every dime you paid them back to go to your creditors. It doesn't impact you, but could get your wife's credit card frozen from futher charges by the lender. (Remember, they can do just about anything they want any time they want - that's allowed by the card agreement your wife signed.)

Have you discussed this with your lawyer yet? He/she may have some ideas to share since it's possible that there have been other clients before you in the same unfortunate boat.

[marko]

My lawyer didn't think it would be an issue since I'm most likely paying back 100%.