Stopped paying CCs

[RedLight]

Hello everyone,

This is my first post here. I have been on other forums for quite a while now and recently found this one. It seems there is a vast amount of info here as well. My wife and I will be filing bk7 soon. We had our initial consultation with the atty last Thrusday and really liked her. Her fees are also very reasonable.

We moved to Texas a year ago so we will be filing with the federal exemptions. We should just barely squeeze in under the means test. If we fall under the first part, do we still have to create the budget portion, or is that only if you fail the first part of the means test?

I also saw the sticky about how to value your possessions and wonder how most people concluded with their values. For instance, we have a couch that we purchased brand new for $400. However, I would only pay someone $100 for it if I were buying it new. Is that the amount you would put on the worksheet?

We are still filling out the massive amount of paperwork our atty gave us and hope this goes well. Luckily we have no equity in our home or cars and are current on everything. Our first skipped CC payment was yesterday...it feels weird not to pay. Oh well...let's get this thing rolling.

[Brookamy]

Just meeting with a lawyer on Thursday. I'm just trying to round up all the info they need. Thinking that I will not be paying on my cards anymore either. It is a strange feeling. Good luck to you! I can't wait to get this "thing rolling" either.

[RedLight]

Brookamy,
I know what you mean. They want so much information your head starts hurting trying to get it all together. My guess is that your atty will advise you to stop paying them if it looks as though you are going through with it and it is a clean case. Sounds like you are in the same boat as me. Good luck to you.

[justplaintired]

Hello everyone,

This is my first post here. I have been on other forums for quite a while now and recently found this one. It seems there is a vast amount of info here as well. My wife and I will be filing bk7 soon. We had our initial consultation with the atty last Thrusday and really liked her. Her fees are also very reasonable.

We moved to Texas a year ago so we will be filing with the federal exemptions. We should just barely squeeze in under the means test. If we fall under the first part, do we still have to create the budget portion, or is that only if you fail the first part of the means test?

I also saw the sticky about how to value your possessions and wonder how most people concluded with their values. For instance, we have a couch that we purchased brand new for $400. However, I would only pay someone $100 for it if I were buying it new. Is that the amount you would put on the worksheet?

We are still filling out the massive amount of paperwork our atty gave us and hope this goes well. Luckily we have no equity in our home or cars and are current on everything. Our first skipped CC payment was yesterday...it feels weird not to pay. Oh well...let's get this thing rolling.

Welcome aboard! You'll find lots of helpful info on here.

Far as valuing your sofa and all other household items, just think of it as a big garage sale. Price things like that. Remember a sofa that has been used for awhile, has little value to others. We just figured out what we'd pay for stuff if we had a sale and our attorney said we did fine.

Good luck!!

[justplaintired]

Just meeting with a lawyer on Thursday. I'm just trying to round up all the info they need. Thinking that I will not be paying on my cards anymore either. It is a strange feeling. Good luck to you! I can't wait to get this "thing rolling" either.

We stopped paying as soon as we met with the first attorney. We didn't go with this attorney, but we knew we were going to BK, and this one said, don't pay, don't charge, so we did exactly that.

It was a weird feeling, kind of scary, but mostly a relief. Once you decided that BK is your only choice, then not paying and not charging is all part of it.

[danaf]

Yes - you still need to do a budget as your lawyer will need those figures for your schedules. Eg, how much you pay for housing, food, electricity, gas, car insurance, car payments, car registration taxes, medicine, clothing....

There are IRS standards that your lawyer will go by and compare your actual against the irs - but you still need to know your budget. And having a budget and knowing where your money is going will be very helpful to you going forward.

[Cali]

I stopped paying a month before I retained my attorney.

The only paperwork I had to do myself was list of creditors, account numbers, and amounts. My paralegal did the rest. I just supplied the numbers.

[TEW]

I have stopped paying CC’s the car the house. Just the electric, gas water and things we need to live. If you’re not keeping it stop paying for it. I wished I had not kept paying the mortgage and car when my lawyer told me to

[RedLight]

I have had a budget for the past several months. Unfortunately, it didn't work b/c we were negative every month and I ran out of places to cut from, hence the bk. I guess the problem is that I am trying to make my budget as real as possible, but having been financially drained, it is hard to budget for stuff. For instance, our clothes budget portion is completely used up by our 3 week old son. My wife and I need new clothes, but have no idea what to budget for this as we haven't bought clothes in almost a year. There is no dining out or entertainment in our budget either. Should I put stuff in there now that we aren't paying the CCs? I just think it would look bad on our part, "sorry we can't pay the CCs, but now we are going to go out and eat and go to a movie." Just have no idea how to realistically budget that in. I don't mean to complain, but I am just having a hard time adjusting to all of these changes.

[TEW]

Redlight

Are you trying to fill out the means test?
There are tables for that on the IRS website. I can get them for you if thats what you are looking for.

If you keep paying the CC's and file BK that money you paid is gone. You will need that money to get things going on your BK

[lrprn]

I have had a budget for the past several months. Unfortunately, it didn't work b/c we were negative every month and I ran out of places to cut from, hence the bk. I guess the problem is that I am trying to make my budget as real as possible, but having been financially drained, it is hard to budget for stuff. For instance, our clothes budget portion is completely used up by our 3 week old son. My wife and I need new clothes, but have no idea what to budget for this as we haven't bought clothes in almost a year. There is no dining out or entertainment in our budget either. Should I put stuff in there now that we aren't paying the CCs? I just think it would look bad on our part, "sorry we can't pay the CCs, but now we are going to go out and eat and go to a movie." Just have no idea how to realistically budget that in.

Whether you are allowed to 'fudge' on Ch 7 expenses is best answered by an experienced Texas Ch 7 laweyr in your area who knows how the trustees in your local court handle this.

If you end up filing Ch 13, then yes, you are allowed to estimate reasonable living expenses that match your neighborhood/city. No one can go 3-5 years with no new clothes, the occasional movie for entertainment, etc.

Bankruptcy isn't debtors prison (although there will be more than a few days when sometimes it sure feels like that! ) Hang in there and keep asking questions. We'll help you sort things out as best we can.

[liz417]

Hi Redlight!

Welcome to this forum. I retained my attorney mid May and she said to STOP charging and STOP paying the CC that day. Yes, it was weird, yes, I was very nervous because I had never missed/was late on a payment, ever! I was giving lots of paperwork to fill out including our expenses. After reading everything on this forum, I took my time and gave myself some time to figure out how much I was paying for things. You don't notice certain things (a lot of "things") because you are so used to "charging it" on the credit card. Make sure you include yearly things like AAA tow package, eye glasses, co payments, subscriptions, vet bills, clothes, stuff you would normally just charge. Once you are on a cash-only basis, you will be able to figure out your monthly expenses much easier (I use the program Quicken, which breaks down everything in categores for me.

Good Luck!