Charge up question...

[Confused33]

I went into BK with a $6000 charge up. I knew that I was going to be responsible for the debt but decided to file anyway for various reasons which I don't want this thread to be about.

What I do want to know is if I am supposed to pay minimum payments on the debt during BK process (prior to 341, post 341).

Secondly, what happens if I just stop paying the debt all together? This is just a hypothetical question and I plan on keeping up with it. It was just a situation that I thought of and wanted to ask.

Also, will they maintain my interest rate on the debt or will the terms be renegotiated after discharge anyway? I was told at one point that I would be able to pay the debt back at little to no interest. True?

[justbroke]

I went into BK with a $6000 charge up. I knew that I was going to be responsible for the debt but decided to file anyway for various reasons which I don't want this thread to be about.

What I do want to know is if I am supposed to pay minimum payments on the debt during BK process (prior to 341, post 341).

Secondly, what happens if I just stop paying the debt all together? This is just a hypothetical question and I plan on keeping up with it. It was just a situation that I thought of and wanted to ask.

Also, will they maintain my interest rate on the debt or will the terms be renegotiated after discharge anyway? I was told at one point that I would be able to pay the debt back at little to no interest. True?

Do you have a lawyer? If so, either s/he didn't educate you, forgot to tell you, or you forgot.

DO NOT PAY ANYONE outside of the process, if you are discharging that debt The day you file, is the day you stop paying anyone that you are discharging. If you do, the Trustee can, and may, go after that money.

I have no clue if they'll keep your interest rate or not. What you need to do is see what happens. It is up to the creditor to file a complaint for non-dischargeability. If they don't file it, and win, then the debt is discharged! Since you don't know the disposition yet, don't pay a dime.

Now as for paying with little or no interesting... I don't know where you heard that. If it was a Chapter 13, and it wasn't considered fraudulent, then you'd pay 0% interest on (probably) a small percentage of the debt.

Since it's a Chapter 7, and if they win their complaint -- that the debt is non-dischargeable -- they can collect at the rate (or new rate) as allowed by your cardholder agreement (or the maximum under State law, whichever prevails). The complaint for non-dischargeability basically makes it such that the BK doesn't affect that particular debt at all.

[Confused33]

Whoa whoa whoa wait a minute.

I'm not supposed to be paying on the car that I am keeping? The house that I'm keeping? What about utilities?

I filed Chapter 7, have a lawyer, and am no asset. The charge up company is the only one still sending me correspondence regarding a debt. Everyone else stopped.

If I don't pay them while I'm going through the process won't I be terribly behind when I get discharged??

What did you mean by this: "DO NOT PAY anyone OUTSIDE of the process". What does "outside" mean?

[justbroke]

Whoa whoa whoa wait a minute.

I'm not supposed to be paying on the car that I am keeping? The house that I'm keeping? What about utilities?

I filed Chapter 7, have a lawyer, and am no asset. The charge up company is the only one still sending me correspondence regarding a debt. Everyone else stopped.

If I don't pay them while I'm going through the process won't I be terribly behind when I get discharged??

What did you mean by this: "DO NOT PAY anyone OUTSIDE of the process". What does "outside" mean?

Let me correct myself.

If you are keeping items, including but not limited to your house or car, then continue to pay them on-time. I was worried about you paying debts that you are going to discharge.

This varies by type of debt too. For example, if you listed your Utility company, that debt will be discharged. The utility should open a new account for you, may require a substantial deposit, and you'll pay the new bills, not the old debt.

For a debt secured by property, like your car or home, you just continue paying them as normal... if you are keeping that property. If you aren't keeping that property... stop paying.

For unsecured debt, like major credit cards, stop paying them.

For "special" secured debt, like department store cards (like Sears, Neiman Marcus, Kay Jewelers, Best Buy, etc), determine if you're going to redeem the property, surrender the property, or continue paying.

For installment debt which you obtained from places like CitiFinancial, Equity One, or AIG Financial, determine if you will redeem or surrender the property, or continue paying. Your lawyer will also figure out if any of the installment debt liens can be removed, if they impair an exemption.

I apologize. I'm going to correct my original post to be specific about the types of debt to stop paying.

[Trixie007]

I guess that the missing piece of information in your OP is: why do you think the $6,000 won't be discharged? Did you include it? Did they object and you reaffirmed? I can't tell by your post why you think you even need to pay it, or where you are in your filing process.

If it were me, I wouldn't just assume that I have to pay, I would wait to see if there's an objection and then go from there. If you've already filed, you have a temporary stay from collection activity, I wouldn't pay anything until I absolutely knew I had to.

Care to provide clarifying info?

[Confused33]

Absolutely!

I filed on 12/29, the transaction of $6000 took place on 12/2/08. The time period between filing and the charge up leads me to believe that it will be disputed and I will most likely have to pay. My lawyer has also prepared me for the fact that I will have to pay. My 341 is on 2/3/09. Nothing alarming on Pacer and I have only looked at it once.

Is there a chance, with that being known, that it will get discharged? If so great, wonderful, and wow. If not, and I end up having to pay it, same story.

Now...if they jack the interest rate up to 20% from 7.24% that its at I might reconsider. I could essentially let it go, right? Its not what I want to do, but its an option, correct?

[justbroke]

Now...if they jack the interest rate up to 20% from 7.24% that its at I might reconsider. I could essentially let it go, right? Its not what I want to do, but its an option, correct?

The key is, that the creditor needs to take an action before a certain date (the non-dischargeability bar date). If they don't file... then it gets discharged!!!

As for the interest rate changes, they may work with you in any event. You just never know.

[Confused33]

The key is, that the creditor needs to take an action before a certain date (the non-dischargeability bar date). If they don't file... then it gets discharged!!!

As for the interest rate changes, they may work with you in any event. You just never know.

I know you've answered it before, but hell lets do it again... LOL

When is this non-dischargeability bar date? In the 60 day period after 341?

[justbroke]

I know you've answered it before, but hell lets do it again... LOL

When is this non-dischargeability bar date? In the 60 day period after 341?

It is 90 days from the filing of your petition. It should be on your Bankruptcy Notice and under the deadlines section.

It should read something like "deadline to file a complaint to determine dischargeability of certain debts".

Remember, that while everything you may read states that such a charge is non-dischargeable, the actual code, 11 USC 523, states that a cash advance of more than $750 within 70 days of filing is only presumed to be non-dischargeable. A complaint must be filed to determine the non-dischargeable nature of the charge in all cases. This is done by an Adversarial Proceeding.

You should plan and expect that the creditor will file a complaint. However, they may not do it!

[Confused33]

Wowzers!! I did NOT know that! Well heck I have something else to be excited about now! I'm going to keep my finger's crossed that they miss it and it gets discharged. That would be HUGE.

[Tbornetun]

You listed them as a creditor, correct? They are still contacting you? That's a no no. As long as you listed them as a creditor, just wait it out and see what happens.

[Confused33]

Yeah, they sent me a paper bill, then an email stating that my payment date was soon to come.

I'm not going to stir the pot with them so that I don't screw myself.

[justbroke]

Wowzers!! I did NOT know that! Well heck I have something else to be excited about now! I'm going to keep my finger's crossed that they miss it and it gets discharged. That would be HUGE.

Not to sully your excitement, but, generally, anything over $4K tends to entice them to file. The reason most don't file, is because an Adversarial Proceeding (AP) can get real expensive. Since your charge is $6K and real recent... I don't see how they are tempted to file a complaint.

I do, however, wish you the best of luck in having them ignore the BK (which seems they did, since they are still sending statements), and it be discharged!!!

[Tbornetun]

Have your attorney send them a letter informing them that they are in violation of the automatic stay. MAKE SURE they are informed of the BK, you don't want to have it come back to hurt you later.

[newimges]

I used 2 of my credit cards within 2 months for several thousand dollars before filing chapter 7 and included them as a creditors. I was prepared for the fact that they could file within the 90 days but neither of them did and both debts were discharged.

Just be prepared and if they don't file - it's not a problem

Good Luck!