Home Depot,charges before 90days

[momoftwo]

I have about 2k of available credit on my Home depot cc. I need to purchase some items for the hurricane season because I live near the gulf coast (30miles from gulf). This year we will not be able to afford to leave therefore I need to purchase the nessesary items to get us through should we be hit. I would continue to make minimum payments on this card up to date of filing, and I would not make any purchases in the 90 day period.

My question is as long as I make the purchases before the 90 day period begins will they contest the charges? I think I could pay them off within the 90 days, but there is a balance on the card now so the payments I would be making wouldn't nessesarily go towards these most recent purchases. What to do?

[butterflywings]

Running up c.c charges when you are considering BK is fraud.

You've already had a BK consult with an attorney so now you are stuck.

When I had filed I remember asking if he had ever had objections from creditors, and he said yes, and that recently he had had a credit card objection on one of his clients who did the exact same thing. They had put charges on a credit card after their BK consult with him,(they had waited out the 90 days too before filing) and those charges were not discharged.

[lrprn]

My question is as long as I make the purchases before the 90 day period begins will they contest the charges? I think I could pay them off within the 90 days, but there is a balance on the card now so the payments I would be making wouldn't nessesarily go towards these most recent purchases. What to do?

Butterflywings is a bit premature in his/her judgment of bk fraud until we know more about why you have to use your card for this very important purchase.

Have you stopped paying your credit cards yet? If you haven't, if you do would you then have sufficient cash to buy what you need without using your card? How much will the cost be to get what you need to prep for hurricane season?

There is a risk that the creditor could see charging something after you've already spoken with a bk lawyer as proof that you knew you couldn't pay the charge off, but frankly it's a small risk. The risk is even lower if you pay on this card until you file.

If the charge is less than $1000, then it's unlikely the creditor will find it worth their time to file an objection to discharging the debt.

If you are using a lawyer, then following his/her advice on what to do in this situation is best. Keep us posted on what you decide to do, ok?

[Flamingo]

What you need to keep in mind here is the risk associated with what you plan to do. If you make purchases on credit cards with no intention of paying the amounts back becuase you plan to file BK, that is fraud. There is why copies of your statements (credit cards, bank accounts, etc.) are requested by the the attorney and trustee to view and also why creditors look back on your charges when they receive your filing. If they suspect fraud, there is your risk. Just know that some people get away with it, some don't. No one can tell you how high or low your risk is.

[momoftwo]

I don't see how going to consult with an attorney over whether or not bk is for you could be a start date for creditors to say this is the day we will begin to hold you accountable. I am only considering filing at this point. I have a lot of questions and concerns regarding filing. I am current on all my bills. I have perfect credit and have never even missed a due date much less gone over 30 days with any creditor. I have even paid over the minimum amount due up unitl the past month.

I do need to purchase some items for hurricane season, but I do not have the money to pay all at once. That is why I was asking if I made that purchase, but continued making the monthly payments then actually what I pay monthly would pay for what I would be buying. For example, I probably need to spend $300, and I pay at least $100/month to them. However, there is a balance on the card now so even though I would be paying the amount I charged in a sense, it would not necessarily go towards that particular purchase.

Thanks, for your advice. I am so confused.

[getouttathehole]

Worst case scenerio is you might have to pay that amount back, or more likely, half of that amount back. If it something you need for your safety and cannot afford it any other way then I would think you should probably get the things needed.

[Flamingo]

I don't see how going to consult with an attorney over whether or not bk is for you could be a start date for creditors to say this is the day we will begin to hold you accountable. I am only considering filing at this point. I have a lot of questions and concerns regarding filing. I am current on all my bills. I have perfect credit and have never even missed a due date much less gone over 30 days with any creditor. I have even paid over the minimum amount due up unitl the past month.

I do need to purchase some items for hurricane season, but I do not have the money to pay all at once. That is why I was asking if I made that purchase, but continued making the monthly payments then actually what I pay monthly would pay for what I would be buying. For example, I probably need to spend $300, and I pay at least $100/month to them. However, there is a balance on the card now so even though I would be paying the amount I charged in a sense, it would not necessarily go towards that particular purchase.

Thanks, for your advice. I am so confused.

We too were never late with one payment up until the time we retained our attorney. We had to supply one year of bank statements and credit card statements and explain deposits/withdrawals over a certain amount and also credit card charges over a certain amount or many made during a short period of time (they were looking to see if multiple charges were made to get things by keeping the amounts under $100 or so but looking for several charges within a certain time period). There is really nothing to be confused about. It is a risk you take to use your card knowing that you are planning to file bankrtupcy and not pay the full amount back. It's as simple as that. If you feel you need those supplies badly then by all means get them; however, realize you may have to explain a few things if the trustee or creditor review your account. We all struggle prior to filing and many of us get deeper in debt trying not to file. So you have to figure out what you want to do in the long run as to your financial situation but do keep in mind that trustees and creditors do look back for a certain time period when you file as to your financial activities. It is usually six months; but it can be up to one year.

[momoftwo]

thanks flamingo for the considerate advice. I am still up in the air as to whether I should file or not. I may just keep paying a few more months and see if things get better. My intentions are not to be fraudulent in any way. I just don't know what to do right now.

[CindyLou]

Ok, you guys, we aren't talking a 56" flat screen and bose home theater!! The OP need to protect the safety and security of her family during a very dangerous time.

Yes, technically any charges you make after you have decided to file could be considered fraud. But that's "could".....not "will"....or does not automatically make it dischargeable. It would have to be objected to by the creditor, and then proven as fraud.

I have a hard time believing that pieces of plywood, etc would be considered a luxury purchase anyway.

I say, weigh your options. Go out and get what you need to make your family safe. And then I would not be paying large payments on those cards. Simply paying the minimums should suffice for the 90 days...

That's just my 2cents. It would have been a much different opinion if they were wanting to purchase luxury items. But as a Southern girl, I understand the need to prepare for hurricane season!!!!!!

[momoftwo]

thanks cindylynn. I am crying as I write this. It means a lot for someone to understand.

[lrprn]

As HHM noted in another reply for Momof2 on this same topic in another thread, we are talking about $300 here, folks. Good heavens! If I didn't know what I knew about bankruptcy, you'd have scared the pants off me too! LOL! Let's try to keep this in perspective.

Momof2, if you truly have no other option and can't save the money from not paying your non-secured bills before filing, then go ahead and charge. Your family's safety is a top priority. You aren't taking a luxury vacation or as Cindy said, buying a 50" flat screen TV.

The chances of Home Depot coming after Momof2 for charging $300 a month or two before filing is about the same as a meteor hitting one of our houses. It would cost Home Depot more to pay a lawyer to file the case than they would ever get back.

Just because something has a 0.1% chance of happening doesn't mean we should leave the impression that it's much more likely to happen, especially with such a small amount of money involved and as advice for a brand new member who is stressed to the max already. Let's all be careful how we phrase these kinds of answers in the future, ok?

[CindyLou]

Does anyone remember the thread about the central airconditioner (was it you, Southernbelle?).....that was even more money but involved the health and welfare of her family. And then there was another member that desperately needed new tires for safety reasons and had a firestone card they wanted to use.....Many of us had given the same advice we are giving here--take care of it, know there is a small chance of an objection (which wouldn't be the end of the world), get what you need and move on.

Whether its $300 or $3000 you gotta do what you gotta do to protect your family.

momof2.....Hopefully you can make your decision either way soon so you can start planning. It always feels better to have a plan, no matter what it is. I'm glad you are here and that we can help

[FreshLikeADaisy]

Momoftwo, just fyi, worst case scenario if you make these charges is that these specific charges (not the entire account, just these charges) would be successfully challenged and not included in your general discharge.

In other words, worst case scenario, you'd have to pay back the $300. (To me, that's a big fat whoop-de-doo-dah: $300 isn't going to be the end of the world either way, imo. Others are free to disagree, as always. )

And that's IF, as another poster mentioned, you have the bad luck of a meteorite hit!

I want to clarify that in the scenario you have suggested, you are not talking about something that would have your entire bk thrown out for fraud, just a single creditor objection filed and *possibly* sustained. As was also noted, the chances of a creditor objection for less than $1000 are slim indeed, but the chances of that objection holding up are almost infinitesimal.

Plus, you're still paying the cards! If you're going to file Ch7, don't make more than the minimum payments... but if you are still making payments on the cards there's really no basis for a creditor objection anyway: fraud, in bk, is defined as making charges without the intention of repaying. If you're repaying when you made the charges... well, that kind of indicates your intention to repay, doesn't it?

I am not saying that those who pointed out the various indicators of fraud, including a bk consult prior to charges, are wrong... only that it is, in the situation you described, a tempest in an incredibly small teapot. Look at it this way: those are the same guidelines used to determine whether charges are fraud, be they $1000 or $1,000,000. Obviously, if you were talking about, say, a $25,000 charge, a creditor would be MUCH more motivated to file an objection AND investigate the circumstances to every possible extent, including asking you about a bk consult in a 2004 hearing or in your 341 examination.

But that just ain't gonna happen with $300. It's not worth it to the lender, the trustee, or the court. You will NOT be the first one to have used credit cards for necessities before filing bk, even when you knew you were already in financial difficulty. It's not recommended, but sometimes it is inescapable. Fortunately for us, it's pretty clear what are necessity purchases and what are not: your trustee will be able to determine that with no problem at all.

So I'm with the others who said go ahead and get what you need to take care of your family! I agree 100%. And while you're at it, please consider buying one of the excellent books about Ch7 -- the Dummies series book, or the Nolo Press book (see my sig for the link) -- so that you can become familiar with the process yourself and little stuff like this won't freak you out more than you already are.

We've all been through hell with this... but it does get better. Your situation will too, in time. I wish you the very best!!!! And please, try not to worry so very much. I know it's hard not to, but things really will get better.

[MajorMike]

I agree with IRPRN and Cindy. Just so you know, when you go and talk to an attorney, that is proof in case you DO get an objection that you were contemplating filing. This is amunition for the credit card companies. That being said, the reason you are purchasing these things is for NECESSITY!! This is completely different then going out and buying a boat. You go buy those things, make the minimums as Cindy said, and do NOT fret over it.

[momoftwo]

Thank you all so much for all of your kind words of wisdom.