uh oh, my lawyer says....

[jayo]

I have a big debt with bank Of America - 'bout 42000. My attorney tells me that there is a 50/50 shot that they will file a law suit putting us in court! At that point we are looking at attorney fees of 175 per hour. The debt was a consolidation deal from April of 2007. I had lost about 500 dollars a month in income, so I took out this consolidation loan hoping that the 150 per month it saved me would help. A few months later my pay was cut another 500 dollars (per month) leaving me with nowhere else to turn but bk..

here are my questions - Are we likely to end up in court and how much money at 175 an hour are we talking about? Also, if we go to court and lose what does that mean? I don't have any money left over at the end of the month - none. I can't repay them.

We live in Oklahoma my attorney is filing today.

[HHM]

Keep in mind, 50/50 is even odds, and April is more than 6 months ago. Granted, the amount is significant, so your risk is greater than someone who did the same thing but for less money, but an objection is probably unlikely.

As for how many hours...the attorney will spend, that depends on how far the issue goes. If there is a problem with BoA, but it can be settled, your attorney would probably only spend 3-5 hours, if it goes to court, your attorney would probably spend 15-25 hours.

[monkatom]

Is BofA known for this? We did the same thing for 50K but it was about 14 months ago so not usre if tehy wilol object? I guess I should have brought that up to my lawyer.

[nazstar]

I have a big debt with bank Of America - 'bout 42000. My attorney tells me that there is a 50/50 shot that they will file a law suit putting us in court! At that point we are looking at attorney fees of 175 per hour. The debt was a consolidation deal from April of 2007. I had lost about 500 dollars a month in income, so I took out this consolidation loan hoping that the 150 per month it saved me would help. A few months later my pay was cut another 500 dollars (per month) leaving me with nowhere else to turn but bk..

here are my questions - Are we likely to end up in court and how much money at 175 an hour are we talking about? Also, if we go to court and lose what does that mean? I don't have any money left over at the end of the month - none. I can't repay them.

We live in Oklahoma my attorney is filing today.

I don't get it. If you file for 7, aren't all those discharged? If they take you to court, what would that accomplish? Only asking because I have $30,000 with Bank of America. They bought out my old credit card.

[jp2861]

I don't get it. If you file for 7, aren't all those discharged? If they take you to court, what would that accomplish? Only asking because I have $30,000 with Bank of America. They bought out my old credit card.

It won't be discharged if it goes to court. If you have other debt that is not objected to, those will be discharged. But, any objections will end up in front of a BK judge for decisions.

[jp2861]

The best thing to do if anyone is worried about objections is to wait it out. The longer you wait the harder it is to prove that you took on debt knowing you'd be filing soon. The key word here is "soon".

[nazstar]

The best thing to do if anyone is worried about objections is to wait it out. The longer you wait the harder it is to prove that you took on debt knowing you'd be filing soon. The key word here is "soon".

Ahhh. Ok. Thank you for the clarification. I did a balance transfer over a year ago and was making all my payments on time until they upped the minimum each month and I was late with one payment and the interest rate went through the roof. I couldn't keep up anymore. Then I was paying them through a debt management program, but I was still struggling. I haven't used that card in almost a year.

[PaKettle]

I don't see how they'd have a leg to stand on with an objection....?

The whole point of a consolidation loan is to save interest and lower payments so you get yourself in a BETTER financial position - is it not? And did they not ENCOURAGE the borrower to do so?

So how can they then turn around and say that you were not intending to pay it back, that you were trying to pull one over on them (seems the opposite to me) or any other similar objection?

Also, if one is facing such several thousand dollars in attorney fees - even with the potential of saving $22k or so if you win - is it worth it? Where does someone who is filing bankruptcy GET the several thousand dollars, and will the attorney actually represent you if you have just been declared a no asset case and basically have no spare income?

I was thinking that if this happened to me, on $15-20k debt from one company, I would probably represent myself instead of paying the attorney so much to do it. But has anyone on this board ever represented themselves in such a case, to anyone's knowledge? How hard is it to do?

I should think it is just a matter of showing them credit reports that you were making payments, that you had reason to expect your income profile to improve, that kind of thing... What do you all think?

[jp2861]

Pa: I dont think I'd pay an attorney to represent me either. How would an attorney know better than me what my situation was. The burden of proof lies with the creditor and it's pretty hard for them to prove my intentions. It's just too intangible. Now, if I lied on a credit application that's another story. I think the fraud issues are far and few between, and most folks just mismanaged their money. Being stupid is not fraud. I can defend myself for being stupid just as well as my attorney.

nazstar: From what you described, I wouldn't worry about anything. Based on what you described, you took some action to attempt to correct the situation. I don't see how anyone could object. Unfortunately, like most debt consolidation victims, you end up filing anyway.

[HHM]

Pa: I dont think I'd pay an attorney to represent me either. How would an attorney know better than me what my situation was. The burden of proof lies with the creditor and it's pretty hard for them to prove my intentions. It's just too intangible. Now, if I lied on a credit application that's another story. I think the fraud issues are far and few between, and most folks just mismanaged their money. Being stupid is not fraud. I can defend myself for being stupid just as well as my attorney.

nazstar: From what you described, I wouldn't worry about anything. Based on what you described, you took some action to attempt to correct the situation. I don't see how anyone could object. Unfortunately, like most debt consolidation victims, you end up filing anyway.

Let's back-up for a second...I think you are misunderstanding what needs to be proved for "intent". The standard of proof is NOT that you actually intended to defraud the creditor. Creditors (and really for any lawsuit), intent is proved based on actions and circumstances. All the creditor has to prove is that you were in financial trouble at the time you made the transaction (i.e. that you were insolvent), or that no reasonable person could have expected to be able to make the payments. So, in that respect, these cases are actually quite easy for a creditor to win. But objections rarely see the inside of a court room as it is usually more cost effective for the debtor and the creditor to settle the matter.

A debtors best defense is TIME, and at least having made some of the payments. On average, most debtors will not see any objections to balance transfers, charges, or cash advances if the debt is more than 6 months old. Unless something obviously sticks out from the filing or the nature of the charges that raises a flag for a creditor, the creditor won't even investigate.

So, although there is a mechanism for creditors to object to the discharge of their debt...it really only happens in the most obvious circumstances, creditors (and their attorneys) will not go to the effrot to test every nuance of the law or see how far back they can push the timeline, because simply, its not cost effective to do so.

[nazstar]

Thanks, HHM. I can breathe a little easier then. We were supposed to be winning a lawsuit for $300,000. For various reasons, it all fell through. We were going to use that money to get ourselves outta this situation so transferring it from card to card made sense when we were just buying a little time. Once the lawsuit ended with a measly settlement (not even enough to cover our lawyer's fees), we were screwed!

[Bandit]

I don't see how they'd have a leg to stand on with an objection....?

The whole point of a consolidation loan is to save interest and lower payments so you get yourself in a BETTER financial position - is it not? And did they not ENCOURAGE the borrower to do so?

So how can they then turn around and say that you were not intending to pay it back, that you were trying to pull one over on them (seems the opposite to me) or any other similar objection?

What do you all think?

They don't care what you were trying to improve your own financial position from your own viewpoint. From their viewpoint you just took on a new debt & it does not matter how, what & why you transfer the debt onto them or what your expectations were.

As already stated, if the person was insolvent when doing that, that is what they will look at, not the debt that incurred years before that you transfer because those debts don't exist now nor what your expectations were as those expectations also do not exist now.
This is why they tell people not to be doing huge balance transfers just prior to BK. The old old debt looks better than new debt in BK- That is just the way it is.

That attorney who said there is a 50/50 chance is telling the truth.

[Bandit]

Just be glad it was with BOA & not one of the more aggressive banks out there

[HHM]

The origial poster's (Jayo) situation is more tenuous than yours Nazstar...Nazstar's BT is over a year old, whereas Jayo's is about 8 months. The amount is significant enough, $42K, that I wouldn't be surprised if BoA sent an attorney to the 341 meeting to at least get some idea of the circumstances surrounding the BT to determine if an objection is warranted. But in your case Nazstar, your BT is probably old enough such that I doubt the creditor will get involved. But even in Jayo's case, the attorney is correct...the odds are probably 50/50 whether BoA will do anything.

[busbis]

I hope I'm not a little of here, we had refinanced our home in Nov taking out 8k for a new roof. We filed Dec 3. We knew that we were going to file at the time of refinance, but we do plan on paying our home outside the bk of course. We plan on surrendering 2 other properties, but one of the mortgage companies is wondering how we just refinanced our primary when we are intending on surrendering. We refinanced through the same creditor. Even if we hadn't refinanced, we would have still filed for BK. Our 2nd was an interest only and we had to convert to a fixed P&I payment before the filing, otherwise we wouldn't have been able too. Do I have anything to worry about?