Should I call my CCs?

[rcoveles]

OK, after stressing and waffling for the past few days - going first toward debt settlement, then to chapter 13, then to Debt Repayment Plan, now back to 13..I was planning on calling all of my card companies tomorrow, and:

A. Canceling all of my cards
B. Asking them to forgive any payments, interest or late fees from now till 3/31, as I am exploring either a DRP or Ch13 (in reality, it is probably going to be 13)

I just figured - why keep the meter running? I know it probably doesn't matter in the end, because they will get what they're getting out of my payments, regardless of what I owe them. Just thought I should be up front. I've abandoned my checking account - it reached zero, but they've paid 2 of my auto pays, and I now have a -$800 balance. I definitely have to call them tomorrow and tell them to either close the account, or at the very least, stop letting things pay!

Also, all of these cards were used in my business. I do have a few (2) personal cards, but unfortunately, they are with some of the same companies I have my business cards with that I'm going to be filing for (Chase = $0 and BOA, where I owe like $1700. Paying off the $1700 would not be a big deal, and a few of my monthly expenses are billed to that card (gym, XM, home security system, Wall st. journal). I usually pay it off in full every month. Also, I do my online bill pay through them, where I pay my phone, Sam's club, and Electric.

Should I cancel this one as well, or should I try to keep it, or are they just going to nuke it on me when I file on my other BOA cards? I've had the card forever, and have an excellent payment history with them on THAT card. In fact, all of my personal finances are fine - it is the business that did me in.

What do you think? Should I call them all and be up front, should I cancel my personal cards too, or should I try to pay and keep at least the BOA card? Will this be seen as preferential payment? If I pay it now, and just charge and pay minimum amounts going forward (the house stuff), will it still get flagged and lumped in?

I'd also like to thank everyone here for trying to make me feel better. I'm sort of coming to terms with this, but I am still stressed beyond belief (how do you exactly know when you're having a nervous breakdown?) I just keep telling myself I'm REORGANIZING, not going bankrupt.

[tigergem]

What chapter are you filing? Under Chapter 13 you are not allowed to keep any cc debt and the banks will automatically close your accounts. I'm sorry I cannot advise on any other chapter because I really just don't know. I have read in other threads that if you close cc accounts with some of these banks, they will seize your money in your other accounts. Some people recommend opening an account at a credit union before you file.

Personally, well.. there aren't any credit unions around here that I am eligible for membership in, but I seriously considered Ally Bank (online), only because I have insurance through GMAC and was kind of steered that general direction. I am probably going to open an account with them soon, but I didn't change my banking before filing, and did not have any trouble. My bank was not listed as a creditor though. But I also only had one little secured credit card with my bank (which they closed immediately on event of the BNC notification).

Call them ahead of time and let them know it is coming? Heck no. No way. You can call and close the accounts I guess, sure, if you want to, but you really don't even need to do that. But tell them why? Heck no. Why would you do that? These creditors are not your friends.

Absolutely never tell anyone, especially a creditor that you plan to file BK! All this does is make them move faster to secure their debt and position with judgments, or act to repossess whatever they can...BEFORE you file. Yes, when you file, they will stop calling and trying to collect...BECAUSE THAT IS THE LAW..they can't continue doing so.

[catleg]

Are you considering chapter 13 because you have assets to protect?

Because to my understanding, the "means test" is only applicable to consumer debt. If your debt is primarily business related you can file chapter 7.

[rcoveles]

Interesting - makes sense I guess. I just was trying to avoid all of the phone calls etc.

I do have Credit Union accounts already in place. Tomorrow, I am going to file for debit cards on them.

[rcoveles]

Are you considering chapter 13 because you have assets to protect?

Because to my understanding, the "means test" is only applicable to consumer debt. If your debt is primarily business related you can file chapter 7.

I incurred the debt under my business, but all of it was guaranteed in my name, and it is all unsecured CC debt. The lawyer told me it sounds like a 13 due to my wife's income level. I will know more after our meeting on Friday.

[tigergem]

Interesting - makes sense I guess. I just was trying to avoid all of the phone calls etc.

I do have Credit Union accounts already in place. Tomorrow, I am going to file for debit cards on them.

All you will do is accelerate collection activity and the calls will start sooner. Leave it be. Until you actually file, what you do is none of their business.

[rcoveles]

All you will do is accelerate collection activity and the calls will start sooner. Leave it be. Until you actually file, what you do is none of their business.

I guess. I'm just not used to this. Sure, every now and again, I might forget to pay something and get a gentle reminder, but I've never just flat out stopped paying. It is new and uncomfortable territory, but I really have no choice anymore.

[tigergem]

rcoveles, you make me laugh, and I don't mean that as an insult.

You are about to become a certified deadbeat. You have permission to be selfish, self centered, arrogant and completely aloof to the "feelings" of your creditors. Trust me when I say this... they do NOT care about YOU, your situation or your feelings. You probably saw the softer side of Sears because you were SUCH a good payer and SUCH a valued customer. Trust me. Miss one payment and they'll turn the dogs loose on you faster than you can blink and your past relationship and history means notathing to them. This is not the 1950s. There is no team loyalty in this game.

[rcoveles]

rcoveles, you make me laugh, and I don't mean that as an insult.

You are about to become a certified deadbeat. You have permission to be selfish, self centered, arrogant and completely aloof to the "feelings" of your creditors. Trust me when I say this... they do NOT care about YOU, your situation or your feelings. You probably saw the softer side of Sears because you were SUCH a good payer and SUCH a valued customer. Trust me. Miss one payment and they'll turn the dogs loose on you faster than you can blink and your past relationship and history means notathing to them. This is not the 1950s. There is no team loyalty in this game.

"Certified Deadbeat"...I like that. I know you're right, and I'll probably (must) get used to the idea. Most of my shame is because now my poor wife has to modify her lifestyle due to my stupidity, but as they say..for better or worse. Unfortunately, she seems to get more of the worse. If I were alone, I wouldn't care so much. I'd care..but not so much.

SO..as of today, I am officially behind on at least 1 account, and my bank account is overdrawn. I'm meeting the first lawyer Friday, unless I can get in with another before that, and this is just a first meet up. I suppose from there, I choose which one I like, then..? We file? Just trying to get a feel for the timing. I won't be paying any of these cards from here on out, so the crap will be piling up. I would love to have waited till maybe June, because when they do the six month average, December is going to be included, which is a very good month due to Xmas sales. It is really going to distort the numbers upwards. Contrary to that, January was pretty much the WORST month ever, and I'm sure the next few will be equally as horrible. I'm also jonesing about the valuation of my inventory, which will pretty much be my only non-exempt asset to speak of. I've read everything from cost to retail to an average of the two to "liquidation value", which I am gathering what a similar item might sell for on ebay. Depending on the method, I could have very different results. I mean..what should it matter what I SELL something for. If I list a t-shirt for $50, which cost me $10, but can be had on ebay for $12..where do you go?

Sorry for rambling. I think the nervous breakdown is in full swing now.

[tigergem]

Probably go with liquidation value, because that is what a trustee wants to know... how much would your creditors actually get under a 7 if your assets were liquidated, and you know darn well you wouldn't get retail or wholesale.... but depending on what all you have and your local rules, etc, there is sometimes a wildcard exemption that might apply to the stuff. Your attorney will know that for sure.

[NoTomatoCan]

rcoveles - As someone who just recently joined the Certified Deadbeats Club, I feel for you. (tigergem - I LOVE that phrase)

It definitely takes some getting used to. For me the calls started a little over a month ago (right before Christmas... nice). But after a while, you get used to them and realize that when you file they will all go away! I strongly suggest spending some time in the "Collections" section of this forum. There is a lot of good advice there as for what NOT to say and how to deal with the creditor calls. Some people say answer them as the calls might let up for a while (and prevent calls to work/neighbors/family in an attempt to "locate" you), others say just let it go to voicemail.

Also search through the CH13 forum for threads on how to best prepare. There are a lot of good tips that are critical to getting through a successful CH13. (like making sure you have a good, reliable car that will last 5 years)

I was almost where you are with my bank account back in early November, but after not paying CCs and some other debts, I have managed to save up a bit, get a new (to me) vehicle loan, pay insurance (home and auto) for the year, and put myself in a better position to be successful.

There is a wealth of information here that will help you out. Good luck as you begin this process!

[rcoveles]

rcoveles - As someone who just recently joined the Certified Deadbeats Club, I feel for you. (tigergem - I LOVE that phrase)

It definitely takes some getting used to. For me the calls started a little over a month ago (right before Christmas... nice). But after a while, you get used to them and realize that when you file they will all go away! I strongly suggest spending some time in the "Collections" section of this forum. There is a lot of good advice there as for what NOT to say and how to deal with the creditor calls. Some people say answer them as the calls might let up for a while (and prevent calls to work/neighbors/family in an attempt to "locate" you), others say just let it go to voicemail.

Also search through the CH13 forum for threads on how to best prepare. There are a lot of good tips that are critical to getting through a successful CH13. (like making sure you have a good, reliable car that will last 5 years)

I was almost where you are with my bank account back in early November, but after not paying CCs and some other debts, I have managed to save up a bit, get a new (to me) vehicle loan, pay insurance (home and auto) for the year, and put myself in a better position to be successful.

There is a wealth of information here that will help you out. Good luck as you begin this process!

Thank you for the info. You bring up a great point - my truck is 14 years old. I was planning on getting some body work done, which was going to cost around a grand, and I am intending to ask the lawyers about this - would it be advisable for me to get a new vehicle NOW, before all of this starts? Should we put it in my wife's name, since she is not filing? OR, is this frowned upon?

[rcoveles]

Probably go with liquidation value, because that is what a trustee wants to know... how much would your creditors actually get under a 7 if your assets were liquidated, and you know darn well you wouldn't get retail or wholesale.... but depending on what all you have and your local rules, etc, there is sometimes a wildcard exemption that might apply to the stuff. Your attorney will know that for sure.

I was thinking of just using ebay and/or thrift store values for most of it. I sell mainly novelty t-shirts in the $18 area (retail), usually pay around $7-9 wholesale, and probably couldn't get $4 for a lot of them. I will be curious to see how this plays out. I run a perpetual inventory system, but I know my books and website don't jive, and I've not done a complete physical inventory in years. It's definitely ballpark - I guarantee items to be in stock, and every now and then, they're not, but rarely, so I don't think there is a material difference. They're welcome to come and count the stuff..I've got thousands of items on hand

[tigergem]

Yeah if you are going into a CH 13 plan, you need a decent car before you file. And before you do too much damage to your credit not paying. In your wife's name? I dunno. Maybe. Since you are getting it within 910 days of filing, I know you can't do a cram down. I know that under a Ch 13 vehicle loan interest can be reduced to prime + 3%, but I don't know for sure if that applies under the 910 day thing or not.

[NoTomatoCan]

You should be able to get the Till rate by including it in your BK. I am including my new (to me) vehicle in our plan. It will lower our interest rate from 12.74% (ouch) to close to 5%. Attorney advised me that this is standard in our district. He did say we should make at least 2 or 3 payments before filing though...

This is something you should put on your list of questions to ask your attorney just to make sure though. This (advice to get a new vehicle) is an area where all of the attorneys I interviewed gave consistent answers.