Should I File, and can I win?

[mikem456]

Hi I am a 25 year old that has had a gambling problem and have racked up about $30,000 in credit card debt through cash advances and balance transfers to allow for more cash advances. I finally learned that even winning in a casino ends up being a bad thing because you will think you can win again and eventually the house takes all. It has been about 2 months since gambling, and I have banned myself from the casino nearest me by signing papers forcing me to stay out of the casino.

I am currently employed making $43,700 plus a $3000 location pay which is under the median income for chapter 7 in NY. I will be getting a $5,000 raise at the end of July this year.

I live at home with my parents and pay rent and other bills which is making it hard for me to pay the debt off. I have no proof of paying bills as I give the cash to my mom and she does not report it on her income taxes.

I have been making minimum payments on my cards, and would like a fresh start.

I have 3 big payments coming up in a few days.
My questions are should i make these payments to show good faith or were the two payments ive made since the cash advances enough?
Will my credit card debts be discharged?
Will I still win in court without proof of my expenses and bills?

Thanks for any help.

PS I have no assetts except a car that is worth about 800$
I have spent my tax refund this year already, and I have money coning from geico insurance for an accident I was in that I plan on paying the bankruptcy lawyer with.

[LadyInTheRed]

You most likely will not have to show evidence of the payments to your mother unless they are unusually high. A local attorney is the best person to tell you what kind of documentation the trustee will request. I suggest you have your mother start writing receipts, just in case you need them.

The issue with the cash advances it that if the creditor petitions to have the debt declared not dischargeable, and there is more than $750 in cash advances from the same creditor within 70 days of filing BK, the debt is presumed to be not dischargeable. If more than 70 days have passed, then the creditor has to prove that you incurred the debt without intent to repay it. Your payments would be evidence that you intended to repay it. I would suspect that the fact that you have a gambling problem would also be evidence that you did not fraudulently incur the debt. Ultimately, it is subjective and the decision would be up to the judge IF the creditor field a petition. A credit card company is not likely to bother unless the amounts are significant and they think they have a very good case. If the creditor does not file a petition to determine the debt is not dischargeable, then it will be discharged.

If I were you and knew for sure I would file BK, I don't think I would continue to make payments. But, I suggest you consult with a BK attorney before making the final decision. Most give free consultations.

Make sure you discuss these concerns with your attorney. It is important that your attorney is aware of any potential issues from the beginning, even if they turn out not to be issues at all which I think will probably be the case.

[mikem456]

Thank you so much for your detailed response. I am sure it will be over 70 days by the time I file. My income comes out to 2400 a month after taxes. Also I forgot to mention that I have about 40k in student loans that have been racking up interest, I assume these loans will not be dischargeable. Do I have to prove all 2400 of my income is being spent? Also do you think I will have trouble purchasing a home in about 3-4 years if I do everything right and begin to build my credit back?

[LadyInTheRed]

It is rare to have to prove every expense. Again, a local attorney can tell you what documentation the trustee normally requests.

If you are young and able to work, you aren't likely to be able to get the student loans discharged.

There are many factors that determine whether you can qualify for a mortgage. But after 3-4 years, it will be possible to qualify.

[mikem456]

Ok thanks again. So I spoke with Upright Law, and there offering me a lawyer for $1900 with all filing fees included. I still haven't been able to speak to an actual lawyer. So I am wondering if two payments (2 months) for the credit cards were enough to show good faith or if I should make a 3rd payment. One of the credit cards have a $180 payment due today.

[LadyInTheRed]

Ok thanks again. So I spoke with Upright Law, and there offering me a lawyer for $1900 with all filing fees included. I still haven't been able to speak to an actual lawyer. So I am wondering if two payments (2 months) for the credit cards were enough to show good faith or if I should make a 3rd payment. One of the credit cards have a $180 payment due today.

Giving a definitive answer to that question would be legal advice which I can't give you. But, I've explained the issues involved so that you can make an educated decision.

The issue with the cash advances it that if the creditor petitions to have the debt declared not dischargeable, and there is more than $750 in cash advances from the same creditor within 70 days of filing BK, the debt is presumed to be not dischargeable. If more than 70 days have passed, then the creditor has to prove that you incurred the debt without intent to repay it. Your payments would be evidence that you intended to repay it. I would suspect that the fact that you have a gambling problem would also be evidence that you did not fraudulently incur the debt. Ultimately, it is subjective and the decision would be up to the judge IF the creditor filed a petition. A credit card company is not likely to bother unless the amounts are significant and they think they have a very good case. If the creditor does not file a petition to determine the debt is not dischargeable, then it will be discharged.

[mikem456]

Sorry, one more question. I have a car that was bought outright that has a kbb value of $1500 (2002 Mitsubishi eclipse with 177,000 miles). Will I lose my car if I file Chapter 7?

[LadyInTheRed]

In your original post you mentioned a car that is worth $800. It is unclear whether this is an additional car.

Federal law has a list of "exemptions" which is property you can keep when you file a Chap 7. Each state also has it's own laws. New York allows you to use exemptions under the state law or federal law. You can read about New York exemptions at http://www.nolo.com/legal-encycloped...xemptions.html NY exemptions allow one car worth $4,000. The Federal vehicle exemption is $3,675. http://www.nolo.com/legal-encycloped...-property.html

It sounds like you won't have a problem keeping your car. Most people do not lose any personal property in bankruptcy.

[mikem456]

Things have gotten worse for me. I have been using my insurance from work (Empire Plan) to see doctors. So I go on Zoc Doc and put my insurance plan, and search for doctors thinking I am covered, meanwhile I find out today that the doctors I have been seeing are "Out of Network". So my insurance company only pays 50% up to a maximum allowable amount.

I still have not filed the bankruptcy yet, but now I definitely will. Will these medical bills be discharged? Also I owe two online casinos money, how can I get these discharged as well?

The insurance company told me that the doctor's office called the insurance twice, and knew he was out of network but apparently he kept it a secret from me.

Thank you

[LadyInTheRed]

Medical expenses are dischargeable. You get online casino debt discharged the same way as other debt. List it on your petition.

[chucho26]

You most likely will not have to show evidence of the payments to your mother unless they are unusually high. A local attorney is the best person to tell you what kind of documentation the trustee will request. I suggest you have your mother start writing receipts, just in case you need them.

The issue with the cash advances it that if the creditor petitions to have the debt declared not dischargeable, and there is more than $750 in cash advances from the same creditor within 70 days of filing BK, the debt is presumed to be not dischargeable. If more than 70 days have passed, then the creditor has to prove that you incurred the debt without intent to repay it. Your payments would be evidence that you intended to repay it. I would suspect that the fact that you have a gambling problem would also be evidence that you did not fraudulently incur the debt. Ultimately, it is subjective and the decision would be up to the judge IF the creditor field a petition. A credit card company is not likely to bother unless the amounts are significant and they think they have a very good case. If the creditor does not file a petition to determine the debt is not dischargeable, then it will be discharged.

If I were you and knew for sure I would file BK, I don't think I would continue to make payments. But, I suggest you consult with a BK attorney before making the final decision. Most give free consultations.

Make sure you discuss these concerns with your attorney. It is important that your attorney is aware of any potential issues from the beginning, even if they turn out not to be issues at all which I think will probably be the case.

Sorry LadyintheRed, but when you say that the credit card company will not bother unless the amounts are SIGNIFICANT, you talk about roughly how much money?

Thanks!