Stopped paying CC's and preparing to file.

[NYHusband]

Summary of my last thread: wife and I have about $100k in credit card debt.

We just stopped paying all of the credit cards at our lawyers advice. This month's extra income will go to our property tax bill (due end of October). After that, we'll have around $2500 a month no longer going to credit cards. Can we save a few thousand? Will we just lose it when we file anyway?

Basically we have no savings to fall back on right now, but I'm not sure what's allowed or how long we can handle the phone calls once they start.

Thanks for any help

[momofthree]

Yes, in a ch.13, you can save assets that are non-exempt, including cash on hand. It simply creates a minimum that has to be paid to your unsecured creditors over the term of your bk. For example, if you have $20k in cash that you can't exempt, you simply have to pay at least 20k to your unsecureds over the 60-month period, or approx $334/mo. Keep in mind, this is just the minimum that you would have to pay, if your DMI is higher than that, you'd still have to commit 100% of your monthly DMI.

[NYHusband]

Is it DMI + cash on hand, or just DMI as it exceeds the non-exempt total? We're looking at $60,000 over 60 months at a minimum going towards unsecured, and I'd love to have $5,000 to $10,000 in the bank before filing for emergencies.

[momofthree]

Is it DMI + cash on hand, or just DMI as it exceeds the non-exempt total? We're looking at $60,000 over 60 months at a minimum going towards unsecured, and I'd love to have $5,000 to $10,000 in the bank before filing for emergencies.

Just your total DMI. If you're paying in $60,000 towards unsecureds then you can keep that much cash or non-exempt assets without losing them. $10k would be no problem whatsoever!

[NYHusband]

Then I guess it's as long as we can deal with the phone calls. That's honestly my biggest concern. I don't know if they can start calling family if we've never had them co-sign or anything. Also, I've been called on my line at work but really don't want the CC companies calling the main number or anything.

I'm 3 weeks overdue on one credit card - account has been paid on time for TWELVE YEARS. They've already called my desk 4 times.

[Cristo]

It's worth it to put up with the phone calls to save up some cash. They get easier as they go, especially since you know they are going to end up!! The first few were horrible for me, but after a while I did not care and actually felt good about telling the aggressive ones to forget it. Tell then to stop calling you at work. They can't call you there if you tell them to stop. The only reason they can legally call your family members is if they can't locate you so go ahead and talk to them when they call just to verify that they got you. Some of mine called only once a week if I talked to them. Others called every day even if I talked to them. I found that they called the most often when I was in your situation......just late and had not actually gone over the 30 day mark yet. That's when they think they have the most leverage over you because they like to dangle the "we will have to report you if you don't pay" over you. Once you miss a payment they know that you really can't pay and it's already on your credit so they have less leverage. The calls slacked off a lot after I was past that point. You really are not under obligation to discuss your financial situation with them but I did with a few and they hardly ever called after that since they knew I really could not pay.

It's hard at first but you can do it. As you can see already your past loyalty to them means nothing so you should not feel bad that you can't pay. I had an AMEX Platinum card for 20 years and always paid it and when I couldn't all they wanted to know was were was the money. Barclays was the worst by far, calling all the time until I missed the first payment. Chase would only call once a week, Amex only called once a week too. Really with the exception of Barclay's mine were not too bad. They usually don't sue until you are late 6 months or more so don't worry. Even if they do you can file the BK and it won't affect you.

[lrprn]

I see you live in New York. The New York bk exemptions don't have a wildcard or cash exemption amount included except for "90% of earned but unpaid (my emphasis) wages received within 60 days before and any time after filing" (see http://www.bankruptcycorner.com/bank...exemptions.php for an understandable listing of all the NY bankruptcy exemptions).

Unfortunately there's also no provision in NY that allows you to use unneeded portions of other exemptions to protect cash as some other states do.

If you haven't set up free or low cost initial interviews with at least 3-4 experienced Ch 13 lawyers in your area, it's definitely time to do that. One of the questions you need to ask during the interviews is what your local Ch 13 trustee and the bk judge accept for ready cash in savings and checking accounts on filing day. Unfortunately I think you are likely to find that it won't be very much - could be less than $500. But the only way to know for sure is to ask, then plan ahead.

Keep asking questions - we'll help you sort things out as best we can. Hang in there!