cash advances more recent than I thought!

[HHM]

Oregon Guy, there is no way we can give you a specific recommendation, even if we knew the details of the cash advance, but for the sake of information...

1. When did you take out the cash advance in question.
2. When did you file BK
3. What did you use the Cash advance.

Chase usually authorizes their local counsel to settle the account for 50% of the disputed amount and accept payment plans of up to 12 months. So, for example, if the disputed amount is $5,000...you might consider a counter offer of $2,500 with a payment plan of $208.33 per month for 12 months. (assuming you can afford that payment).

You only settle if you can actually afford the payment plan. Because the reaffirmation agreement will include a clause that "if you miss a payment, the original balance is reinstated and becomes a judgment." If there is no way you can settle, then let it go to court and let the judge decide. If the creditor wins, all that happens is the debt is designated as non-dischargeable and becomes a judgment against you and they would go about collecting it as with any other judgment (i.e. wage garnishment, bank account garnishment, etc). Keep in mind, they can only dispute the "specific" charge or charges in question. If you had a long standing balance of $12,000 on your Chase card, and 3 months before filing BK you took out a $3,000 cash advance, Chase would only dispute the $3,000 advance, not the entire balance.

[inhocknow]

If it goes to court and the judge has to decide, he can make a decision that less then the total amount or is it either discharged and you owe zero or you owe the entire amount of the bill?
Thanks for your help.

[Oregon Guy]

I took out a couple of cash advances within 3 months prior to filing for bankruptcy at the end of July. I used the cash advances to do fix the fence on my home, and to update the heating/AC. I totally anticipated being able to pay back Chase. Then I had some un-expected medical bills which drained me of my savings and got me behind.

[HHM]

Timeline is essentail here, you need to be more specific.

What were the exact dates you took out each cash advance, and what ws the exact date you filed BK.

To answer the other question, if the issue goes to court, it is generally an all or nothing deal. The disputed amount will either be declared discharged (thus, debtor owes 0), or it will be declared non-dischargeable, in which case the debtor owes the entire disputed amount.

[Oregon Guy]

I did a cash advance in February and in mid May. I filed for Bankruptcy on July 31st.

[B12]

Oregon, did you use a lawyer for the BK?

If so, what does the lawyer say about it?

[HHM]

The May cash advance is the problem...that advance falls VERY CLOSE to the 70 day rule. Any cash advance more than $750 obtained within 70 days of filing BK is non-dischargeable (Section 523(a)(C)(II)). The May advance is your biggest problem. Even though the advance is outside the 70 day rule, it is only outside by a week or so. That is going to be a tough one for you to win. The advance you should probably look to settle if you can.

The February advance is more open. They are probably throwing the February advance on top of the May advance to try to get a little bit more money. But whether the Feb. advance can be discharged will depend on the factors that have already been discussed in this forum thread.

[PaKettle]

2 Things PA....

As I have reiterated several times, the "trustee" DOES NOT MAKE THE DECISION. You keep referencing the trustee, but the trustee is not involved with creditor objections in any way. The hearing is before a Bankruptcy Court JUDGE.

First, thanks again for explaining. I was confused over the fact that it is the Trustee who asks questions at the 341 meeting, but then if any objections are not settled "out of court" then it goes to a hearing before a judge. My ...Dummies book did not make that distinction, at least I did not pick it up if they did.

So, my question was: At the 341 meeting, if a creditor is grilling you about whether or not you were going to be able to make payments on the transfer you took out, do you have any leeway in defending yourself, as opposed to just answering yes or no? In other words, If they were to ask you, "Did you not know your income was less at the time you took this transfer, so you would not be able to make payments?" could you answer, instead of just yes or no, "Yes, I knew, BUT... (I expected my work to pick up soon, as it usually does in the fall". Or "Yes, I knew BUT we expected my wife's unemployment benefits to get extended" or for her to be able to get a job right away". Something like this?

If the objection actually goes to court, YES, you have some leeway in how to defend yourself. But you have to understand the facts you have to defend, you have to convince the judge that you HAD a reasonable expectation to pay back the debt. So in that respect, whether the credit card company solicited you is largely irrelevant (that is what they do and they have a 1st amendment right to do so). The fact of the matter is, "blaming the credit card company" is not going to win in court because ultimately, the debtor makes the final decision as to whether to take out a loan.

Okay, that's what I wanted clarified. Got it.

I was going on perhaps questionable information in the book Bankruptcy For Dummies (duh!) which states things like "Courts don't merely consider whether a debtor was at fault in making excessive credit-card charges: they also consider the degree to which creditors irresponsibly push credit cards on folks who can't afford to pay. ...[The creditor] must prove it had no reason to know you were drowning in debt at the time it authorized the charges.".. and it goes on making some other points in that vein.

But judges are generally sympathetic to debtor's in these types of hearings. When looking at the decisions the debtor made regarding the charges and finances, the judge merely asks if those decisions were reasonably (not that they were the "best" decision possible).

No one on this forum can really predict how a certain judge may rule in a particular case and even most attorney's would have a hard time predicting how a judge in their district will rule in a given circumstances.

For example, if a debtor was unemployed, $40,000 in credit card debt, and 4 months prior to filing BK took out a $10,000 cash advance to go gambling...if the creditor objected, that creditor would almost certainly win. The debtor was deep in debt, had no income; thus, there was no way the debtor could have reasonably believed he could pay back that advance.
However, if a debtor was $60,000 in debt, employed, and was at least able to make their minimum payments, and was not routinely charging basic necessities to their credit cards, and that debtor charged $5,000 vacation...if a creditor objected, that creditor would probably lose. Even though the debtor was deep in debt, the debtor was meeting his basic needs, and were not late on any payments, so that debtor could reasonably anticipate being able to absorb that $5,000 vacation and at least make minimum. payments.

Okay, that is reasonable. Let's hope they ARE reasonable. In my case, I did have every expectation of continuing making payments it's just that I didn't account for my income vs. my outgo very well. So maybe that was NOT reasonable... Guess I'll just have to see. But if people who filed bankruptcy were good at budgeting, they wouldn't be in this predicament would they? (well, many of 'em)

Personally, I think you are getting worked-up over nothing. You have a lawyer, you should be having this discussion with him.

Well, I'm very GLAD you believe I am getting worked up over nothing! That makes me feel much better! I do plan to discuss this with my attorney. But I'm trying to learn how this works and part of that is determining whether or not this was something worth bothering him about. The nice thing about asking here is that there are many people to answer questions so:
1) one gets a consensus, and
2) others can learn from one's questions.

Sorry for being a pain in the backside, HHM. Just trying to learn how this works. I'd rather be prepared for a "worst case scenario" than to be caught by surprise with no defense or not knowing how to answer objections the best way. Thanks again.

[HHM]

1. The 341 Meeting. If a creditor shows up at the 341 meeting. NO, you do not get to offer a defense (after all, it is not a hearing). The 341 meeting is ONLY a question and answer session and the debtor's role is, you guessed it, to only ANSWER questions. If a Creditor's Attorney shows up, you are under oath, and the creditor gets to ask away. However, you CAN "explain" your answers if the creditor attorney allows it, but if the attorney is at all familiar with how to do deposition, he will appropriately cut you off. Again, the creditor's attorney, if smart, is not going to ask you point blank how you expected to pay it off.

Keep in mind, the purpose of the questioning is to establish facts...a smart attorney would ask
How much did you earn in "X" month.
How much did you spend in "X" month.
The facts speak for themselves...the Judge can draw the inference that you made less than you spent in "X" month.

2. I understand where the book is coming from with the "irresponsibility issue with creditors". but that issue only really comes into play during the initial granting of credit. For example, if you acquired a NEW credit card 6 months before BK (and did not do so under false pretenses, a defense could be that the creditor was irresponsible to some degree, but that is very very very difficult to prove, and the debtor still has to overcome their own irresponsibility in using the credit). If you have an established relationship with a lender...the irresponsibility argument tends to fall by the wayside.

And you're not being a PIA.

[jp2861]

Pa, how was your payment history thus far with your lenders? It was brought to my attention to highlight the fact that you had a responsible payment history in the past, if you did. Show your payment history from your credit report. It makes it a little more difficult for a creditor to prove irresponsibility if you have a good payment history prior to filing.

[PaKettle]

Pa, how was your payment history thus far with your lenders? It was brought to my attention to highlight the fact that you had a responsible payment history in the past, if you did. Show your payment history from your credit report. It makes it a little more difficult for a creditor to prove irresponsibility if you have a good payment history prior to filing.

Thanks for that advice!
I had a AAA rating all the way up until I stopped paying (could not pay) in July/August. Never missed ANY payments, period until I stopped paying.

However, to paint a clear picture, as near as I have been able to piece what happened together, the downfall began in January 07 or so when my work went from 5 days a week to 4 days a week. It wasn't a big enough difference that we saw it right away because we had money in the bank from our tax return. So although we did borrow the money in March, we had not yet felt the pinch of my lower income due to the tax money in the bank up til then. So we orrowed the money from the credit cards to pay for dental and pay for a coupla vacations.

Again, at that time, we were not really aware of the hole we were getting into because of the tax return which had "supplemented my income". Having had money in the bank, and as you mentioned, we were still making minimum payments just fine, it felt like we were doing fine as usual.

Slowly over the next few months, (April to July) as the bigger payments from the cards due to the money we borrowed added up, we began to feel the lower income. So even though it was a slow downward spiral, we didn't see it coming until my wife's unemployment ran out in July and suddenly that little cushion we had disappeared and THEN I realized "Yikes! We don't have enough to make our $500 loan payment." Then I began looking at all the other bills and adding up our income minus my wife's U.I. and it FINALLY occurred to me, "We can't make all these payments anymore!"

Anyway, thanks for the info re the credit report showing we made on time payments all through that period, even up to "the end".

[CATCHMEIFYOUCAN]

Infamous for cash advances

Catchmeifyoucan here,

Just my experience, I mostly used my unsecured credit for cash advances the past several years before I filed. Even took out consolidation loans to pay them off only to rack them up.

But at the same time I was paying them back in a timely manner all due to casino or lottery hits, up until the time I had to file - things started getting tight, my luck was running out.

I had 2 credit cards and 1 consolidation loan from the same credit union.

I barely made one payment on a cc I had just aquired in the month of April 06 (I ended up filing July 06) I blew the whole line of credit $10,000 in less than a month).

I filed for Ch13, so that kind of saved me from objections (I GUESS). Creditors seeing that I filed for Ch13 from the beginning, saw that I was going to be paying them back through the plan, no objections at the 341 meeting and no questions about the advances or gambling sprees from the Trustee (just my luck I GUESS).

3 months later I converted to Ch7 (because I dropped one full time job which put me below the median income for my state). Another 341 meeting held and no objections and no Trustee questioning anything outside the norm.

You take the risk and prepare for the worst, I figured well if I can file BK and be able to discharge most of my credit GREAT, even if I expect to some of the creditors back, that is still the risk I was willing to take. THANK GOODNESS, I got a discharge of everything.

Best of LUCK, Catchmeifyoucan

[PaKettle]

Guess you were unlucky in gambling, but lucky in bankruptcy!

Catchmeifyoucan here,

Just my experience, I mostly used my unsecured credit for cash advances the past several years before I filed. Even took out consolidation loans to pay them off only to rack them up.

But at the same time I was paying them back in a timely manner all due to casino or lottery hits, up until the time I had to file - things started getting tight, my luck was running out.

I had 2 credit cards and 1 consolidation loan from the same credit union.

I barely made one payment on a cc I had just aquired in the month of April 06 (I ended up filing July 06) I blew the whole line of credit $10,000 in less than a month).

I filed for Ch13, so that kind of saved me from objections (I GUESS). Creditors seeing that I filed for Ch13 from the beginning, saw that I was going to be paying them back through the plan, no objections at the 341 meeting and no questions about the advances or gambling sprees from the Trustee (just my luck I GUESS).

3 months later I converted to Ch7 (because I dropped one full time job which put me below the median income for my state). Another 341 meeting held and no objections and no Trustee questioning anything outside the norm.

You take the risk and prepare for the worst, I figured well if I can file BK and be able to discharge most of my credit GREAT, even if I expect to some of the creditors back, that is still the risk I was willing to take. THANK GOODNESS, I got a discharge of everything.

Best of LUCK, Catchmeifyoucan

[CATCHMEIFYOUCAN]

Im better off

Actually, LUCKIER now at the present moment. BK gave me the FRESH Start I needed. But I'm still a gambler just under control.

GOOD LUCK, Catchmeifyoucan !

[jp2861]

Bottom line is nobody really knows for sure how any filings will turn out. You can predict and rationalize all day but until you file you won't know. Statistics show that most fly without a hitch. I have a bunch of transfers and cash advances before the 70/90 period and will just have to deal with objections, if they occur. For me, settling any out of court isn't an option because I can't afford the settlement payments or the taxes that would be due. So, if I do get any objections I will have to try to deal with that without a lawyer. I'm at the point where I'll just have to see where the cards fall. Not much more I can do other than drag it out longer, which I don't think will make much difference.