another newbie with questions

[Broke64]

I have been spending the last seven days reading as many of the very informative posts from all the helpful people in here as I could and have learned so much already.However, there's a few things I'm not quite sure how to go about.....

I have been current for years on all CC's up until last week (did not pay 2 of the highest ones in order to pay others). I realize this is the beginning of the process(end?) and I and my husband have now agreed that filing a CH.7 is the only way to go about it.No need to mention, it was killing us to keep up with all the payments and having zero left each month.
I read a lot about stopping payments immediately and not pay any CC's at all, but what about stopping them gradually (I have to save cash for an attorney and such).In theory, I could gradually seize all payments in, let's say in a matter of 5 months or so? Or does it have to be done in 90 days?

We have been living off our CC's for quite a while now(just groceries and such) and have very little credit left on a last card.We are a family of 5 here. In addition, there is a tax refund coming up in february I would like to use towards a used car maybe. I'm pretty sure we will lose the cars we have now(even though we were always on time with payments and still are).



So my question is, can I slowly stop payments on CC's in order to save up some cash (no savings whatsoever) and buy a little extra time, or is that a bad idea and gets looked at badly later? (I have not been able to see an attorney yet, but will.)


thank you for your response, it's very much appreciated

we live in Florida

[lrprn]

First without knowing more of your specific financial information (state you live in, how much income you both made the last six months, if you have children, the equity in your house and cars, etc) it's hard for us to help you sort out if you qualify for Ch 7 or not.

The best thing you can do now is make appointments for free or low-cost consultations with 3-4 experienced bankruptcy lawyers in your area. Lay out everything about your finances and find out what your options are. You'll get a rough idea if you qualify for Ch 7 and what issues there might be if you file.

Then after you know you are going to file for sure, at that point it makes no sense to continue to pay any credit card bills that will be discharged when you file. You can stop paying all of them at once and use that money to pay your lawyer's fee. If you can file Ch 7, the lawyer will need to be paid in full before you can file.

It's best to have no charges on your credit cards for at least 90 days before you file and no cash advances for at least 70 days before filing. This way the burden of proof that you made the charges or took the payments knowing you were going to wipe them out by filing is put on your creditors, not on you.

Hope this helps sort things out for you a little better. Keep asking questions - we'll help you sort things out as much as we can.

[MomIcantFindmy]

Plus, our attorney said if we continued to selectivly pay one credit card over another and it amounted to over $500 or $600 (I dont remember) then the trustee could take the money back from them. Stock up your pantrys and freezer, toiletries and other household items and when you do stop paying, do them all at the same time. Seriously, the best advise is what lrprn said and see 3-4 experienced lawyers. That way you can plan and do what is best for you during this time.

And welcome...another Floridian!! Have you noticed how many of us there are?

[Broke64]

Here's what our situation looks like income wise:

husband 2950.00 a month/net
me 800.00-1000.00 a month/net


mortgage 1450.00 a month (first and second, no equity bec. of refinance)

Payments unsecured debt 1200.00 a month
payments secured debt 1065.00 a month (incl. 2 cars and student loan from husband)

plus utilities(250.00), phone(155.00).

you can see we are always short of a certain amount and it has been like that for a long time.
We have three children ages 24,19 and 15 years.Two of them have jobs, but they don't make a ton of money and still live with us.
We live in Florida.

I just want to avoid to talk to a lawyer too soon and then having to spend double the fees when we get ready to file. Or maybe I'm mistaken here, not sure.


thanks for the answers so far, good to see people offering help

[Broke64]

Plus, our attorney said if we continued to selectivly pay one credit card over another and it amounted to over $500 or $600 (I dont remember) then the trustee could take the money back from them. Stock up your pantrys and freezer, toiletries and other household items and when you do stop paying, do them all at the same time. Seriously, the best advise is what lrprn said and see 3-4 experienced lawyers. That way you can plan and do what is best for you during this time.

And welcome...another Floridian!! Have you noticed how many of us there are?

Thank you for the info.........

and no, I had no idea how many Floridians are on the board. But it must be quite a few if you say so. Doesn't surprise me though , life is tough here with all these outragous living costs.

[lrprn]

husband 2950.00 a month/net
me 800.00-1000.00 a month/net

We need gross income, not net. Gross income is what is compared to the state median - the first hurdle to decide if you can file Ch 7 or not.

I just want to avoid to talk to a lawyer too soon and then having to spend double the fees when we get ready to file. Or maybe I'm mistaken here, not sure.

Yes, you are mistaken about the costs of the initial consultations.

It's the nature of the beast for bankruptcy lawyers to all have clients who have no money. That's why most still offer free initial consultations. A few will ask for a token payment - $25-50 - for the initial talk. It's well worth the cost.

You'll learn a great deal about what's possible in your situation by meeting with several bk lawyers - there's no obligation.

Otherwise you will be guessing or making false assumptions. It's far better to know where you stand so you can make good decisions for your family.

[PaKettle]

Look around on this board for a link to a site that lets you fill out the means test on line and see if you qualify. THat's the best way.
Make sure that after you stop paying your bills you don't have too much money left over at the end of the month after paying all "set" expenses (rent, gas, utilities, insurance, etc.)

[halloweendmb1]

I have a question, I understand that you should stop paying credit cards, but what about the debt you want to reaffirm such as mtg or car payments? Is it ok to keep paying them?

[genseeker]

any debts you want to reaffirm, like mortgage or car, you do need to keep paying. and it is ok to continue to pay things like student loans and past due child support because these are debts that cannot be discharged in BK

[Broke64]

thanks everyone for their answers,



I will look for an attorney this week and speak to him or her first and see what our options are.

Looks like we passed the means test, so should be no hurdle there at least.

[nazstar]

I live in Florida too!

Definitely talk to a lawyer. I saw 4 separate lawyers and it didn't cost me a dime. I just verified they gave a free consultation. I poured over the boards here first to formulate better questions. I downloaded the means test, and all other paperwork and filled out the relevant questions on how much I owed to whom, how late I was, brought paystubs, etc. Essentially, I wasted NO TIME with re-hashing my story. I also put everything in an Excel spreadsheet and just handed the lawyer a copy when I sat down. It cut back on about 30 minutes of fact finding and gave me more time to ask specific questions.

Good luck to you!

[lrprn]

I have a question, I understand that you should stop paying credit cards, but what about the debt you want to reaffirm such as mtg or car payments? Is it ok to keep paying them?

YES!! You must keep paying payments for your secured assets that you want to keep after filing Ch 7. If you want to keep your house, keep making the payments on time. If you want to keep your car(s), keep making those payments on time. If you want to keep any other secured assets with payments, keep making those payments on time.

These payments must continue after you file too.

[PaKettle]

I live in Florida too!

Definitely talk to a lawyer. I saw 4 separate lawyers and it didn't cost me a dime. I just verified they gave a free consultation. I poured over the boards here first to formulate better questions. I downloaded the means test, and all other paperwork and filled out the relevant questions on how much I owed to whom, how late I was, brought paystubs, etc. Essentially, I wasted NO TIME with re-hashing my story. I also put everything in an Excel spreadsheet and just handed the lawyer a copy when I sat down. It cut back on about 30 minutes of fact finding and gave me more time to ask specific questions.

Good luck to you!

That's a great idea, having all the info ready. I did that too, and my attorney was very happy about it. Like you say, if they can see all the relevant info they need on a sheet or two of paper then you can focus on asking other questions about things like recent balance transfers, or whatever your specific issues are.

As to qualifying etc. one thing they sometimes want to know is what caused you to not be able to pay your bills? Things like lower income all of the sudden or over time, or sudden huge medical bills, or losing a job, that kind of thing makes it look much better. But even if it's just a matter of "I was paying and paying and paying and I just realized I was never going to get these things paid off", that also should work as long as after not paying you don't have much money left over at the end of the month.

If suddenly after not paying your bills, you have a lot of money left over at the end of each month, then you may get thrown into a Chapter 13 payment plan instead of a 7.

[halloweendmb1]

My student loans are currently in deferrment until August 2008 will that be a problem if I file soon?

[FreshLikeADaisy]

My student loans are currently in deferrment until August 2008 will that be a problem if I file soon?

Check with the DOE on this, but I keep hearing that bk throws student loans into deferment anyway so I don't think it will be a problem. Also, Pa here reported that after he filed, his student loan account online showed up all zero'd out, but the DOE told him he could still pay. So if you manage your student loans online you may see that as well.