Balance Transfers into your account

[Medora]

Hi, Is there a difference between a straight balance transfer between credit cards, or one that goes directly into your account that you use to pay off the cards yourself?? They still show up on the credit card as "balance transfer." If you can show a paper trail, i.e. payments directly to a credit card, rather than for a shopping spree for example, does it make a difference in avoiding a potential objection from a creditor?
I could sure use some clarification here... I am understanding the 6 month rule, and also have always made payments and will continue to do so before filing... but we're talking large transfers--$30K, $24K, $16... ?
Thanks for your input.

[keepmine]

Actually, you took a cash advance if it goes right into your account.
With those amounts, wait as long as possible before filing.
Have you talked with a lawyer yet?

[2Bshinyandnew]

I used a cash advance check to pay my electric bill 2 or 3 months ago. I made a copy of the check before I mailed it.

[ready2puke]

I took a 17k bal trans check into my checking act. from B of A. 8k of it went back to another B of A credit card, 5k went to my Schwab act into stocks (lost it) and the rest went to rent, other cc bills.. I'm waiting 7 months on this one.

[AngelinaCatHub]

Medora, be very careful. What you are talking about could be assessed as either preferential payments, or fraud and can go back two and possibly more years if they suspect any kind of “game playing”. If you are planning bk, I would just pay the minimums from this time on, not use the cards and let as much time go by as you can then cut your payments off for the price of your lawyer. KEEP it simple and honest. ‘Hub

[banca rotta]

Hi, Is there a difference between a straight balance transfer between credit cards, or one that goes directly into your account that you use to pay off the cards yourself?? They still show up on the credit card as "balance transfer." If you can show a paper trail, i.e. payments directly to a credit card, rather than for a shopping spree for example, does it make a difference in avoiding a potential objection from a creditor?
I could sure use some clarification here... I am understanding the 6 month rule, and also have always made payments and will continue to do so before filing... but we're talking large transfers--$30K, $24K, $16... ?
Thanks for your input.

Depending on your financial state at the time of the transfer I would probably wait out the "12 month rule" before you even think about filing with those large amounts.

Were you making a decent income where you had the ability to pay back the debt at the time of the transfer? What changed since the advances were made?

When you file the creditor/s may want to know this and dispute it depending upon your situation.

I wouldn't just rely on the "so called 60 or 90 day rule or even the 6 month rule" with those large advances unless you want to pay some or all of it back. Just my opinion.

[Medora]

Hi All,
Thanks for your replies...which scare the hell out of me!! Fraud? Games?? No, no! I had no intention of filing BK up until very recently. I have always transferred amounts between my credit cards--just used the bank deposit to make it simpler and avoid transfer fees. We've stopped using the cards, and will continue to pay the a little over the minimums. I just don't understand how taking advantage of balance transfer opportunities could be viewed as "tricky" or "suspicious"?? Heck, it's how I've managed to survive for more than 10 years with such huge credit card balances! The truth is that we bought our house 4 years ago with the intention of selling it at the right time to pay off the debt... we were in the middle of a small addition (to increase the value) when the bottom fell out. We couldn't complete the project in time to sell it before we were already upside down. Ouch!! Since then, we've just been trying to survive, like everyone else, making very good income and paying DOWN the debt until very recenlty.
That's the truth, I never have any intention of saying otherwise or tricking anyone. I haven't spoken to a lawyer yet, because we've just made the decision to file.
I can't possibly be the only one who got caught in this position!!
Help!

[StartingOver08]

No you are not the only one. I had some balance transfers last year and by the end of the year my income was 1/2 of the prevous year. I called and negtiated with BOA/MBNA and Chase. I continued to make payments, but at a highly reduced rate (about 1/2 of the normal payment because I was in the hardship program). I did not even admit to MYSELF that I needed to file until summer of this year. So fortunately it has been well over 12 months since using those particular LOC. Putting time between the balance transfers/cash advances is a protective thing for you. Most of us are/were in your exact position.

[Medora]

I took a 17k bal trans check into my checking act. from B of A. 8k of it went back to another B of A credit card, 5k went to my Schwab act into stocks (lost it) and the rest went to rent, other cc bills.. I'm waiting 7 months on this one.

Okay Pukey, that's like me--I did a $36K from one B of A and put most of it to another B of A...how could they possibly protest that? It would seem kind of lame!

On all of these I will wait at least 6 months, but 12 months could be a prob... we HOPE to be making more money by then, will have probably lost the house (and the major expense which will help us with the "means")... I just get very nervous when I hear talk of fraud or US Trustees...
In case it matters, the total cc debt is about $119K, plus $157 on the 2nd Mortgage if we give the house back which seems likely. Do those numbers automatically land me in hot water?? If we keep the house, would it be easier for the BK??
Also: Income down more than 50% at end of 2008 than previous year.
Tryign to do it all right, but panicked here!

[evilxs]

There is a difference between balance transfers and cash advances. If you can show the trustee where 16k leaves here and pays creditor here to get lower card rate and 32k goes here and etc then you are going to have a much easier time of it. If 16k cash advances and 9k goes to this card then you're getting into hotter water.

Now that is just the trustee. He is happier if he feels you are not being fraudulent.

The creditors will protest losing those kinds of sums, if it went to the same company you have less to worry about. The left hand often doesnt know what the hell the right hand is doing. If it went from one company to the other, they have more of a leg to stand on but then the trustee gets involved to figure out a fair solution to the preferential payment.

If you can demonstrate that when you were juggling you in good faith believed you would be able to keep everyone paid, and you were doing it for the right reasons, lower interest rates, etc, you're giving your lawyer a lot more to work with.

With a wage reduction of 50% and a good lawyer this is not the end of you. I would get some free consultations with your local lawyers and get several opinions from people in your district on how long to wait. The lawyers there know the trustee and they know the judge and they know what you can and cannot get away with. Don't be afraid to plan your BK somewhat. You have to look out for you.

[Medora]

Thank you Evilxs. What you say makes sense, and I was hoping we'd get a chance to explain our situation, not just automatically get thrown under the bus! It was all done in good faith (if not naivete!). I wish I hadn't done those stupid balance transfers--but like I said, I was thinking just about getting good long-term rates, not about how it would affect a bankruptcy! If I HADN'T have done the transfers, that would have been out of character. 2007 income was up 25% over 2006 so we had high hopes for 2008, but instead had some bad luck with our business. We hope to do better next year, so we had wanted to get BK and foreclsoure out of the way to start over. We'll get local attorney advice.
Thanks again for helping me not freak out over the weekend!