Credit fraud, atty says" cross that bridge if we come to it"

[WhatToDo4]

Here's my situation and its a long one...sorry.

I took a leave from my job after having a severe anxiety attack in Dec. 06 , I had anxiety issues before but never an attack that froze me like this one. I tried going back to work after 2 months in Feb. 07 and the first day back, it was even worse and I just quit, my mind just told me that was it and I was done.

Exactly one month after that, I had a bad motorcycle accident, I had no insurance and it left me bedridden for months and also made the anxiety that much worse. I went through around 14k in savings and then began living off of one of my credit cards. When I reached the limit on the card, I opened a new CC with a 0% offer in Oct.07 to transfer the debt, I kept telling myself no problem, I will get another job in my field making around the same money and would knock out this debt.

Feb. of 08, I did get another job in the same field and 2 days in had another anxiety attack and again quit. I realized that having a job in customer service like I did, was not going to work and have now started working making allot less money, really cant pay all bills so I am looking for a second job.

I finally decided that I would look into filing chapter 7 and destroy my credit score (765) and now heres my problem.

When I opened the 0% CC I was not working but used my last job and salary on the application, at the time I in no way wanted to destroy my credit and had all intentions on paying, so in my mind it would be ok. I am guessing they went by my credit score and didn't look into my current salary?

I had a consultation with an attorney and he didn't think the CC company would have a reason to go look into my application or salary and when I told him I was concerned about it, he replied...Again, I don't think it will come up and we will just cross that bridge if we come to it.

Also, I was using those great handy CC checks to put into my bank account, pay my bills and pay the minimum payments on the cards. I am still current but I cant continue to build more and more debt. Once I have a second job I should be able to make the minimums for now.

One CC is around 7k and the other is around 8k, all of my other CC's are at 0 balances and havent been touched in years since I paid off the last debt I had.

Has anyone ever ran into this when applying for a CC and then filing chapter 7? If so, how did you handle it?

Any and all replies are appreciated, this has been one of the hardest years of my life!

[HHM]

I think your attorney is pretty much on the level. I have yet to hear of a creditor actually objecting to discharge based on false information contained on a credit app. It is simply not worth their time and effort to investigate that particular fact. Instead, creditors look for obvious fraud, and in the process of preparing an objection on other grounds will then see if there was a problem with the application.

[WhatToDo4]

Than you for your quick reply! The only thing that made me worry was that he asked for my 2006 tax return and then later changed it to the 2007. I didn't know if that information was for him to look at or something that he would have to give the CC companies, the 2006 would be fine but the 2007 would show that I didn't make the money on the application.

I am setting up another consultation just to get a second opinion of the whole situation. At this point its either try bankruptcy or just let them sue me, I don't have or make the money to give.

Thanks again for your quick response!

[HHM]

You will have to turn over 2007 income tax returns (as that is the most recent tax year) and those do get filed with the court and are available to creditors upon request.

[WhatToDo4]

With that being the case, I don't understand why the attorney would say he didn't think it would come up? If my application said I made 60K, which I was before and the tax return shows 14k, which was only from a 401k, why would they not look into that? Do you think the attorney just figures it would just be more money for him if I needed to go through more because of it?

This has been crazy, one day I say to myself, just go try and survive and when they sue you, they sue you and the next day
I am thinking, if I don't file, the other CC at around 7k will sue me also?

I will see what the next attorney says.

Thanks again, its nice just having someone else to discuss the situation with.

[PaKettle]

With that being the case, I don't understand why the attorney would say he didn't think it would come up? If my application said I made 60K, which I was before and the tax return shows 14k, which was only from a 401k, why would they not look into that? Do you think the attorney just figures it would just be more money for him if I needed to go through more because of it?

This has been crazy, one day I say to myself, just go try and survive and when they sue you, they sue you and the next day
I am thinking, if I don't file, the other CC at around 7k will sue me also?

I will see what the next attorney says.

Thanks again, its nice just having someone else to discuss the situation with.

I am no expert, but from reading here in the forum for the past 6 months or so, I can tell you that I don't think you have anything to worry about.

People filling bankruptcy tend to think there is going to be this huge investigation into your finances, but there almost never is much of an investigation at all. They mostly look to see if there is any evidence of your having owned property that you might be hiding. If there is no evidence indicating you are hiding property then it's just a matter of your income for the previous 6 months being low enough to qualify you for Ch. 7, and that's pretty much it.

COULD you get an objection for having lied on your application? Yes.
WILL you get an objection? Chances are you probably will not.

[HHM]

COULD you get an objection for having lied on your application? Yes.
WILL you get an objection? Chances are you probably will not.

That pretty much sums it up. When credit card companies look at objections, they are looking for objectionable transactions. Look at it this way, even if you lied on your credit card app, the bank still has to prove you did not intend to pay back that debt. I assume you made at least some payments toward this card, correct? Having a debt declared non-dischargable because of a mis-statement on a credit app is actually pretty tricky for the bank, so it is rarely, if ever, the sole ground for objecting to discharge.

As I mentioned above, lenders tend to only look for obviously objectionable transactions, and if the attorney happens to ask the question about the credit app, that credit app claim gets piled ONTO the objection, but a credit app claim is rarely the sole reason for an objection.

The worse case scenario is that you still have to pay that debt back after your BK, but the remainder of your BK will go through just fine, so it is not as if you will be any worse off for having filed BK and getting an objection in that BK.

[WhatToDo4]

I am so happy I found this website! I know that what is said isn't pure fact and you all are not attorneys but its good to here other views from some of you that have some knowledge on the subject.

While I used the CC's to live off of, I was always making the payments, sometimes a little more than the minimum. My whole goal was to get the debt knocked back down to 0 where it was and save my credit score, once I was working making the money I did before. I live in an apartment and always wanted to build my credit as high as possible so that in the future, I may be able to own a house someday.

If I believed I could pay it off working two jobs I would but I don't see how it would be possible covering my basic bills and the minimum payments on that much debt.

Something else the attorney said was to stop paying the CC's immediately but from what I have searched here, if you do that soon after running up a debt, it looks worse on you. I opened the CC with 0% back in Oct of 07 and thought that would look bad if I stopped paying them right now. I also told him that I had just now used another CC check so I could cover my April bills, wouldn't that look horrible if I then stopped paying the CC?

I am waiting on a call back from another attorney so I can get a second opinion before I do anything different, it just doesn't seem right to me.

[Cali]

WhatToDo4,

You need to relax and stop worrying so much. This board and members are very helpful and I doubt they would give you bad advice.

Good luck to you!

[JollyGG]

I am so happy I found this website! I know that what is said isn't pure fact and you all are not attorneys but its good to here other views from some of you that have some knowledge on the subject.

While I used the CC's to live off of, I was always making the payments, sometimes a little more than the minimum. My whole goal was to get the debt knocked back down to 0 where it was and save my credit score, once I was working making the money I did before. I live in an apartment and always wanted to build my credit as high as possible so that in the future, I may be able to own a house someday.

If I believed I could pay it off working two jobs I would but I don't see how it would be possible covering my basic bills and the minimum payments on that much debt.

Something else the attorney said was to stop paying the CC's immediately but from what I have searched here, if you do that soon after running up a debt, it looks worse on you. I opened the CC with 0% back in Oct of 07 and thought that would look bad if I stopped paying them right now. I also told him that I had just now used another CC check so I could cover my April bills, wouldn't that look horrible if I then stopped paying the CC?

I am waiting on a call back from another attorney so I can get a second opinion before I do anything different, it just doesn't seem right to me.

It looks bad if you have never made a payment. However, that isn't the case here.
As long as using the convience check wasn't a change in your cc usage pattern you are probably safe to stop paying your cards at this point. You do, however, want to wait at least three months, preferebly six months from the charges to file. But, you don't need to be paying the minimums during that time.

[WhatToDo4]

Just about all of the debt I built was through the convenience checks, it was how I paid the bills and the minimum payments or sometimes a little more. That makes me feel even better, I am very appreciative of everyones advice and comments, it just makes things feel allot better.

Again thanks to everyone that has replied! I will let everyone know what the next attorney says and how things go.

[BKFLA]

I was freaked out about everything when we first decided to file....I still am, but have learned to stop worrying constantly about every detail. Haven't had our 341 hearing yet, and yes, I freak out about that too. But, like the pp said, don't worry so much. I read on here all the time and have yet to hear about creditors researching that much into applications. We thought we were going to make about 15k more a year than what we actually did when my husband's bonuses were cut and my work laid me off. Best of luck to you.

[HHM]

On another note, we need to back-up a bit.

Do you have an income now? Unless you have income coming in (i.e. from a job, disability, something), and that income is enough to meet your basic living expenses (and you may need to think about how to cut your expenses), it is premature for you to be filing BK. BK is a way to get out of debt to get back on your feet financially, but if you have no money coming in the door, BK will not solve your underlying financial challenge, i.e. no income.

[WhatToDo4]

I just started working again but in a different field and NOT enough to survive on. I am looking for a second job and or a better paying job daily. I have a few potential jobs that would be enough to live on and then I would go forward with the bankruptcy. I understand what you are saying though and it would make no sense for me to do it and still go under.

I still have cable but I dropped it down to the bare basic that only gives me my local channels, nothing else. I tried a couple of different style antennas so I could get rid of cable all together but none of them really pulled in the channels enough. The cable is $17 a month for the local channels. My cell phone contract isn't up yet so I have been thinking of just getting rid of my home phone and using the cell phone, that would save me around $40 a month. I gave up my unhealthy fast food and eat everything at home now to save there.

I live alone and my bills without the CC's are, rent, car insurance, gas, food, cell, home phone, internet and cable.

I am hoping I get a call back from the second attorney tomorrow, he is local and I would love to hear a second opinion. So far, the search engine and you all have made me feel allot better and informed me of more than the first attorney did, he really just asked some questions and every time I tried to ask something he kind of brushed me off so he could ask another question.

Thanks again.