Attorney says recent charges won't matter?

[Atrix]

Had my first meeting with attorney...he said charges I made in early June about....$5000 on 3 different cards...aren't going to matter and we don't need to wait 90 or so days. He says in Chapter 13 no one is going to look at recent charges...Does this sound right?????

I am in Riverside County, CA.....I was told in an earlier thread that the Trustee here is fair.....I was just wondering if anyone else had any experiences?

I feel so much better after seeing attorney....Like him a lot so far....

Thanks in advance for any info.

[SMinGA]

The charges may need to be paid in full during your plan - worst case scenario. As long as you're proposing at least $5k to unsecured in your plan it should not be important.

[mitupper]

It is a lot different than a chapter 7 in that regard. The creditor you owe the $5k to can submit an objection in court and request they are paid in full but if they do not then they will be paid the same percentage as the rest of the creditors. We never had to submit any kind of recent credit card bills or anything for the Chapter 13. We did when we filed Chapter 7 a few years ago. So, I would tend to agree with your attorney in my experience. I wouldn't worry too much about it. Just go ahead as planned, and know the creditor could pose an objection, but it's not too likely. The court most likely won't even look at that.

[justbroke]

Yes, a Chapter 13 is a lot different than a Chapter 7 when it comes to the "presumed" abuse within the 90 days preceding the filing. Chapter 13 creditors are much more lenient because they expect that they will get "something" over the life of the Chapter 13.

Spending $5K within the 90 days, however, could make an alert Trustee ask some questions, but that's unlikely. What the Trustee is trying to do is make sure you didn't abuse the system by running up debt just before filing. That would be on things like plasma TVs, expensive vacations, and jewelry just before filing. Even if you did, you could pay it off through the Chapter 13 plan anyhow.

Be forewarned that this is not a license to go run up debt just before filing. There are some things that will drive the Trustee batty and they can object to your confirmation if they feel that you have gamed the system. If those purchased ($5K in 90 days preceding filing) are mostly for non-luxury goods and are for things like rent, food, medical needs, car or home repairs and things like that... you'll probably not hear a thing about it.