Some questions

[havetodecide]

Hey everyone,

I have been reading this forum for a while but could not post, i am happy things got resolved with the problems the board was having and i have lots of questions! I have checked other forums but this one is great, i like the atmosphere here.

I will be seeing a lawyer this Friday to start the paperwork. I talked to him over the phone and based on what i made in the past 6 months he said i would qualify for Chapter 7. I owe 40K in CCs (cash advances, etc) and my only asset is a car worth around 6.000. In the past 6 months i have made so far 6.000.00 (freelance work), and because of that i have used CCs and cash advances to complement my income in the hopes that i could get another job in my field. I have stopped now using my CCs for more than a month because the hole is just getting deeper, the job search has been harder than i thought.
Here are some of my concerns:

- I have been paying my cards on time so far but tomorrow is my Capital one due date, not sure what to do yet, really nervous about it, i have never been late on anything, i understand what some people would say here, if you're going to file why throw your money away?

- In the past six months i have been taking cash advances every month (around 1500 - rent, etc) I read here about the 70/90 days rule but in my case it's been a little over a month only since i stopped using CCs. I wonder if they would ask me to pay it back since it is so recent but at the same time i would not be able to come up with the money. (will see what lawyer has to say)

- Lawyer said they would take my car (FL car exemption - $1000) but they could offer me the option of keeping it and pay in installments. I really need the car since whatever freelance work i can get it is usually done at client's location.

- Rent - my friend is allowing me to stay at his place for $200.00, but it is only temporary. Later on i will not be able to find cheap rent like that anywhere, just wondering when i have to move out and how i am going to list my rent expense(receipts required, etc). Also based on what i made last six months i am pretty sure my income is going to be negative compared to my expenses when i don't have the cards anymore to use, so that's another complication, since i read here negative income is not a good thing either.

I am sorry for the long post, i have so many questions and i am really nervous about making some decisions, still so much i have to understand. My reasoning for filling BK is to get a minimum wage job to survive and probably that will not give me enough to pay back what i owe, i really had hopes i could get something in my field but it has been more than a year and nothing so far.

Thanks

[BKTango]

Are you still paying on the car or is it free and clear? As far as the cash advances the longer yu put between those and you filing, the bigger the burden of proof will be on the creditor claiming any sort of fraud or objecting to their discharge. But on that note, if in fact you know without a doubt that you are going to be filing and you have educated yourself to the fullest and discussed the situation with at least 2-3 lawyers since their intial consultations are free...stop paying on those credit cards and use that cash for your normal living expenses and learn to adjust your living to that cash only.

Always feel free to ask any questions or vent...we have all done it. I am sure someone can come along and answer your questions more in depth, I just wanted to mainly "bump" your thread as it was posted today and already buried.

[havetodecide]

I was already thinking that my case looked so bad that no one wanted to put their fingers on it, responding any of my questions, appreciate the "BUMP"

The car is free and clear. I was going to sell it at first to pay some bills but now i am driving so much that i need the car, can't get an older one. Yes, i was thinking about the fraud issue, even though i was trying to pay them back every month and used the money for rent and some bills? I really wish i could wait more but my situation is just getting worse, those are some questions i will have to present to the attorney, if he says creditor is going to want the money back for those recent cash advances, i will have to wait and make it work somehow.

My mistake was relying on the hope that i could get a job in my field very fast and pay back but then things went by, month by month and basically here i am, trying to put a stop to it.

Thanks

[keepmine]

There is no rush to file. Wait out the objection period. Get a minimum wage job in the meantime just to pay your basic living expenses. Don't rush off and file and then, be the subject of an adverserial hearing.

[havetodecide]

Being the chicken that i am i ended up paying my Capital One card that was due today , even with no money it is scary to think that i will have to stop paying the cards and get sued.

I am still seeing the lawyer this Friday just to ask some more questions (cash advances, etc) and then i will have to decide when to file.

Thanks

[BKTango]

Generally speaking and I use the term "generally" loosely, most companies will not pursue an actual "lawsuit" against you until you are roughly 6 months past due. Now that I have said that I am one of the others that have been sued right out of the starting gate (apparently Mr. Creditor had a bad day). But it can happen. You have some time to play with. Even if that did happen, they have to serve you, have a court date, get a judgement then exercise that judgement. You are still paying the creditors so don't worry about that. As soon as you know it's time, stop paying them.

[jal1129]

I know it can be scary when you first stop making those payments. I think we have all been thru that. If you are committed to chapter 7 there is no sense in throwing away your money on cc payments. Between my husband and I we had 4 or 5 crap 1's, had'nt paid in 6 months and we were not sued.

[havetodecide]

Thanks for answering questions

I just came back from my first meeting with lawyer. Even though i already got the questionnaire with me i am still undecided about filing. I will have to stop paying my cards on Monday since i ran out of money, so it's not by choice, thank God i have a roof at my friends house, although temporary, more and more i see the mess that i am in, sorry if i vent a bit, got no one to talk too.

The issue with the cash advances, adding up the 6 months it comes to almost 8.000 on one card (my last advance was beginning of February) he said it will be an issue, creditor can definitely contest and make me pay for it for being so recent. Also the car i told him that probably i would not be able to keep it and make payments on it ( i own the car, worth around 6500, only asset)

His suggestion: Since i am not keeping the car and i need means of transportation, i would sell my car before filing, pay a big portion of the card that i used for cash adance, use the remaining money on a down payment of an used car, around 1.000, exemption in Florida (used car around 3.000 so i can pay as little as i can per month) He said this way i would show intent to pay the card but probably the other cards would contest since i showed preference to one card but that would be among them to work it out.

Also i told him that i wanted to wait a little, 2 months more, he said paperwork would probably take a while anyway, but said with my cash advance, 2 more months would not make a difference.

So that's where i stand right now, still scared about stopping the CCs payments, in my mind, once i stop them, there's no way back, i will have to file, since i understand my APR will go way up?

Thanks for the support

[JollyGG]

If you have been current on payments up till now. I would suggest -

1. Stop payments to CCs

2. Find a lawyer you are completely comforatable with (you have time to visit with a number.)

3. Pay your lawyer.

4. Wait, Wait, Wait, Wait, Wait, and Wait some more.

5. Once someone seeks a judgement only then file.

Put as much time between that last cash advance and filing as possible. You probably have six months to a year before judgements are persued. That gives you plenty of time to put that last cash advance as far in the past as possible.

[SamanthaJones]

You have nothing for creditors to take.

They will not be in a hurry to sue you. Your lawyer gave you bad advice- you'd be without a good car, and without the money from the one you had, only to file CH7 anyway. It would be a preferential payment, and the trustee would take it back from that creditor anyway- how is THAT going to make them happy? Stop paying unsecured debt and use that money to prepare for a new way of living- don't be in a hurry to file- really, you cannot be arrested for not paying that debt. Get a lot of free consultations until you find a comfortable match. Get a PO Box for mail, and chane your phone number to deflect the calls and mailings that will come in the meanwhile.

[havetodecide]

JollyGG - I am current with my CC payments but like i said, from now on i will be forced to stop payments (not using CCs to pay other cards anymore)

SamanthaJones - Well, the car is paid for, so they can take it right? not sure how that works. I also have to research more about lawsuits since that is my biggest fear, i want to understand better how to deal with that, as others have said here, maybe it can happen in six months or even less, so i want to try to avoid that.

Thanks everyone

[manglicmot]

If you are going to continue paying on the card that had the cash advance, make only the minimum payments. If you pay too much it will be ruled as a preferential payment which is not allowed. My guess is that you will only need to make a couple of payments to show good faith, then after that you can let it go into default.

[happycarl]

Havetodecide

IF you are really current with all your creditors, the typical MasterCard/Visa/Discover/American Express issuers is not going to do anything for the first two to three months except send you bills and notices. Then the phone calls will begin sporadically. Don't be your own worse enemy.

The WORST that is going to happen is they will sue you, that is months and months down the road and more than likely a year off. You don't have that to worry with.

Now get real here, real quick, YOUR CREDIT RATING IS SHOT FOR THE TIME BEING, accept that right now. If you are truly in over your head and cannot pay your bills when due, there is NOTHING YOU CAN DO ABOUT IT. This can be the biggest hurdle for most to get over.

STOP PAYING THOSE AND ANY OTHER BILLS THAT YOU HAVE THAT ARE NOT NECESSARY LIVING EXPENSES AND OR FOR SECURED CREDITORS (like a house, car, maybe major appliance, etc.) YOU MAY NOT PICK AND CHOOSE WHICH UNSECURED CREDITOR TO PAY, that is called Preferential treatment and will be undone by the Bankruptcy process anyway.

Save your money to pay for your Bankruptcy attorney.

Now the reason others have told you to WAIT is because OF THE CASH ADVANCES THAT YOU TOOK ON YOUR CREDIT CARDS. The Bankruptcy Court is not really going to care how badly you needed them to live on, it is not your Mama. What is going to count is the TIME BETWEEN THE LAST CASH ADVANCE YOU TOOK AND THE DATE OF FILING OF YOUR BANKRUPTCY and whether or not the presumption is on the credit card issuer to prove FRAUD OR ON YOUR TO PROVE THAT YOU WERE NOT BEING FRAUDALENT.

There is a difference between your using your credit card to pay say for example your PHONE BILL DIRECTLY ONLINE OR you taking a CASH ADVANCE TO PAY OUR PHONE BILL IN PERSON.

IF you file too soon, YOU COULD WIND UP WITH THOSE CASH ADVANCES NOT BEING DISCHARGED AND YOU WOULD STILL HAVE THE BANKRUPTCY ON YOUR CREDIT RECORD FOR 10 YEARS FOR A CHAPTER 7.

THINK CAREFULLY and DON'T DECIDE WITH YOUR EMOTIONS AND BEING SCARED.

[SinkingFast]

Sell the car and get another like the attny suggested. Sooner rather than later. But don't pay the money to the CC. Use the $$$'s for necessary living expenses. Don't leave the money sitting in the bank. Stash it in a shoe box or buy blank money orders to use as needed.

As others have told you, CC's won't just up and sue. There's a general process they all go thru.

2-3 months of no payments in regular customer service. Then your acct will be moved to inside collections. That's when your phone will start to ring. Another 2-3 months there before your accts will be potentially turned over to outside collections.

Creditors are not stupid. They are gonna check you out before they spend good money coming after bad. They'll pull your Credit Reports to see if you're paying anyone else anything. They'll check property records at the Court House to see if you have anything worth pursuing to place a lien against. They'll check to see if you have sufficient wages worth the effort to garnish.

If you trade the car and get one with less than your $1K Exemption in equity, there's nothing there worth coming after. Sounds like you don't own other property. And your wages don't sound like they're worth the $$$'s to get a Wage Garnishment Order. Basically, you would be pretty Judgement Proof.

And that buys time. Creditors don't want to waste money if they aren't gonna get anything in return.

We went almost a year of no payments on 9 accts. Only 3 went to outside collections. No law suits. No Judgements. No Liens. No Garnishments.

[manglicmot]

I have a $4000 cash advance from November. When I told the paralegal about it during my initial consutation, she was looking at her computer. She threw her pen down on her desk and jerked her head in my direction with a pained look on her face. She said that I may have to pay some or all of it back even though it is outside the period of presumption. When I go in with my paperwork next week to prepare my filing I am going to draw up a paper that shows my payments on that account which are current and above the minimum required. At the time I took the cash advance I had decided I was not going to file BK even though I knew I was in trouble. However, the hours at work kept dropping and my plans did not work out. BTW, the payment on that account was due yesterday. For the first time in years, I am late on a CC payment.