Stop paying everything???

[OKBK]

I am headed for BK ch. 7 and see no other way out of my situation. I am 80K in the hole with credit cards and upside down on my house. Should I just stop paying everything and save the cash to start over? My credit is gone so I really don't care. I can't do it now because my BK lawyer said I will have to wait a year because I had personal loan with relative which I transfered onto the CCs. That loan was used to payoff my CC before so not trying to get over on them. If I loose everthing I will need to have cash for a new place and a new car.

[freshstartfl]

I would at least make payments to the cc you used to transfer debt away from your family member. Show a good-faith attempt at paying it. As for your other credit cards, most of us do stop paying at least a couple months before filing, if not much earlier than that. As for your house, forecosures take a long time, as I'm sure you've read on here. Many people live in their house up until the point of the Sheriff sale, and end up being able to say they lived there for "free" for 12 months or longer. Do you pass the means test for Ch 7?

[Floridagail]

How long ago did you pay the family member off? Lots of people put taxes on their cc and file bankruptcy. I am with your lawyer wait a year. Stop paying as your credit is not good now. Several cc will just write you off after referring it to several diff collection agencies and sending letters, save your money for attorney. you may not have to file, if noone sues you. I waited 2 yrs to file after stopping paying cc. I got sued by CO, so I was forced to file. I had to change my phone to np. I just attended my 341, and the trustee did ask me if I did any bal tranf or cash advance in last 12 mos. and did I pay any relatives in last 12 mos. I was simple case so dont know why she
grilled me so much. MY son stopped paying his cc and noone ever sued him and the
credit file cleared out in 7 yrs. So dont rush. good luck

[OKBK]

I would at least make payments to the cc you used to transfer debt away from your family member. Show a good-faith attempt at paying it. As for your other credit cards, most of us do stop paying at least a couple months before filing, if not much earlier than that. As for your house, forecosures take a long time, as I'm sure you've read on here. Many people live in their house up until the point of the Sheriff sale, and end up being able to say they lived there for "free" for 12 months or longer. Do you pass the means test for Ch 7?

I was planning on making a few months payments to the CC and not paying the mortgage, but then I thought whats the point? I will probably make a few payments and then stop. By that time my credit will go way down and I am expecting the CC companies to raise my interest rates which will make the payments unafforable anyway. I just paid the relative off $30,000 last month. I qualify for chapter 7 because I am expecting another child in April so that will make a family of 4 which from what I read has to be below 67,000 I think, which we will be below. I live in Florida.

[StartingOver08]

Ok, that $30,000 is an insider payment. The look back period on an insider payment is ONE YEAR.

The Trustee WILL be interested in that payment. They will 'avoid the transfer' - in other words, require the funds to be paid from your relative to the Trustee if you file Bk within this year.

The Fl exemptions are crummy. Essentially $1000 for vehicle and $4000 for other ONLY IF you do not claim your homestead. This is per person. So your total is $5000. There is a little dissagreement about the amount. Some Trustee's have allowed a total of $6000. There is another thread that discusses Fl exemptions. I was only allowed $5k and was just discharged last month in the Southern Dist of Fl. So you will need to chat with your attorney for details.

If you are not going to make payments during the year leading up to your BK, just prepare yourself like you are doing. Some of the people on this board have gone much more than one year before they filed (for the same reason). At least you know in advance what you have to do to protect yourself.

[OKBK]

Ok, that $30,000 is an insider payment. The look back period on an insider payment is ONE YEAR.

The Trustee WILL be interested in that payment. They will 'avoid the transfer' - in other words, require the funds to be paid from your relative to the Trustee if you file Bk within this year.

The Fl exemptions are crummy. Essentially $1000 for vehicle and $4000 for other ONLY IF you do not claim your homestead. This is per person. So your total is $5000. There is a little dissagreement about the amount. Some Trustee's have allowed a total of $6000. There is another thread that discusses Fl exemptions. I was only allowed $5k and was just discharged last month in the Southern Dist of Fl. So you will need to chat with your attorney for details.

If you are not going to make payments during the year leading up to your BK, just prepare yourself like you are doing. Some of the people on this board have gone much more than one year before they filed (for the same reason). At least you know in advance what you have to do to protect yourself.

If I do stop paying my Credit cards, whats the worst that could happen? They get a judgement and then what? I am under the impression as soon as I file chapter 7 anything they would have done like wage garnishment or anything else would be wiped out right?

[StartingOver08]

You are right!

If I do stop paying my Credit cards, whats the worst that could happen? They get a judgement and then what? I am under the impression as soon as I file chapter 7 anything they would have done like wage garnishment or anything else would be wiped out right?

Yes, you are right. It takes time for them to get a judgment. And the CH 7 will wipe it out. Just keep your records during this year so that when you file you have everything to show. There are some people that have gone much longer than 12 months and never been sued. Look at some of treehuggers posts - he only had issues with local creditors, not so much the national ones. There are others too. The collections forum has ideas on how to get through the year and keep your sanity.

[OKBK]

If I am not paying anything then where is my money going? Will they ever ask where all my money has gone? I know to keep it in cash but will they ever say there is no way I spent it all or do I have to prove where it has been going?