I can't believe I am here

[StuSpenz]

I started failed businesses, I had troubled children and I have fought since 1995 with enormous credit card debt now approaching $80,000. I lost my job in the beginning of April, and went to the bankruptcy attorney for the first time. He told me I make too much money (@ $160 KK) salary to declare bankruptcy, and have to wait at least 6 months. Then he told me that my wife, in an effort to deflect Citibank finance gouging moved $37 KK to a PNC bank 1% interest card 2 months ago, and that likely will be challenged as fraud. We have paid all our bills, all our lives.

I don't even know how to get through the next six months with the bills we have. $1000 on car mortgages. $1600 on credit card minimum payments. We have tried and tried, but it just kept getting worse. We sold our house, and it only put a dent in it. CitiBank has us over 20% in payments. Now we are told that my income, and our effort to opt out 2 months ago for a lower interest card, will make us look like a fraud case. Regardless, we have to wait six months to file.

I don't know what to do. Who should be advising me. I am in Pittsburgh PA, and would love to find help. This shouldn't have happened, but we are a Christian couple who tried and tried for 15 years to pay off the debt.

[DebtEnder]

Best advice I can tell you is wait however long it takes for 6 months to pass since your last big income amount and that balance transfer. If you are current on all your bills at this time if you stop paying now you can probably ride it out for another 4-5 months with no major legal action. Therefore you would then be able to save up for the bankruptcy filing and pay on your secured assets you wish to keep such as your house (if you still have one) and cars.

6 months is the magic window, it may be possible to do it a little sooner as the income from last year starts to fall off and that balance transfer goes to 6 months. So maybe with 4. Just stop paying on any unsecured debt you have. It will all be gone after you are discharged so don't worry about it.

Just learn from your experience and move on with your life and be thankful for your wife and kids and your faith will see you through.

[StuSpenz]

I thank you for your advice. I am so depressed and almost ready to do something drastic. I just don't understand how someone who has worked so hard has gotten to this point. I always thought that if I made enough money that this would go away. Now I am at a point where after 15 years, nothing I have done is meaningful.

And to add insult to injury, my attorney tells me that I could actually go to prison for fraud. As smart and capable as I am, I find myself at this point of abject failure.

[keepmine]

Nobody is going to jail.
I'd make 2 suggestions. Stop paying all cc debt now except for the balance transfer. Make the minimum on that for another few months. Next, see another couple of attorneys.

[DebtEnder]

The most likely worst case is you don't get that one debt discharged and have to pay back the 14k. Yes there are worse possible options but tbh even the one I mentioned is iffy. However if the CC does not object during the 60 days from your 341 hearing and discharge then it gets discharged with the rest. The longer you can wait to file the less chance there is of any objections occuring.

[indy]

Get a different laywer, this one sucks,

Second, let time pass like others said 6 months, Just pay the CC some but not the whole thing, they will still call you but just let the machine take it. I would pay on those CC for 6 months but even if it is 20.00 at least it shows you are trying.

the amount if debt does not really matter, My chapter 7 is for 1.1 million dollars,

45000 is credit card and 1 million is real estate.

it will take the credit cards a long time to sue you we are talking about months and months and months if not years. Just keep them on the hook thats all. Dont use any more credit cards from this point. When they do file the lawsuit then you do BK.

as far as the credit card transfer of 37k, that is a big amount but where did the money go to.

Heck most of my 41k in credit card debt went to the good old stockmarket in September of 08,

Well if you look at the stocks from oct 1st08 to feb 09 well you can guess what happend.

but the point is most of that 41k went to stocks, and i have proof that the money is gone, not sitting under my mattress.

All they want to know is where is that 37k. If you spent it on crap then the worst case is you will have to pay some of it back. But at least you wont pay all of it back, most of the time they will settle for .20-.40c on the dollar.

Even then you can do a payment plan with them or just do a chapter 13.

There are lots of options, but just keep in mind you may have to pay some of that back. But it would only be most likely 10-15 grand.

you are still clearing out 65k or so.

Again get rid that lawyer the last thing you need is someone telling that crap, instead find one who will work with you and help you with some pre BK counsling.

Good luck and you can always start over, heck most people on this board have.

[relief13035]

You aren't going to jail. Get a new attorney - this one sounds like a quack.

[eddiep]

Don't do anything drastic. You will get through this. I stopped paying on my cc in September and we still have not filed, we are getting anxious, but our lawyer also advised us to wait, for other reasons. Keep coming here and getting as much knowledge and support as you can and the time will go by fast. Everything will work out.

So what you did was transfer the money from one card that was in your name to another card also in your name to get a lower interest rate, is that right? Your lawyer was probably just trying to warn you to wait, which is good advice but you need to find a lawyer that makes you feel comfortable and confident, the worst will not happen if you listen to your lawyer.

[catleg]

Don't panic...you will be fine...nothing you have done is fraud.

As far as PNC, that's their bad luck. (How did you get 37k onto one card??) As long as the balance was incurred 2 months ago while you were still working and had the intent to pay, it's legit. Now your circumstances have changed and you're out of work. I would just stop paying all the credit cards, it's survival time, they won't like it, but there's not much they can do about. The minimum on that PNC would be at least 750/month which is a pretty big bite if you're unemployed. Just make sure you don't do your banking at PNC!

Penna has slightly funny rules as a debtor, they can't garnish your wages but I believe it's a little bit easier for them to come after your property if they get a judgment. But if you plan to file in 6 months it's extremely unlikely they will get a judgment before then. I have over 20 cards I haven't paid in 6 months and haven't been sued by any of them yet.

If you have no income except unemployment you will qualify for BK ch7 in under 6 months, as your rolling average for the prior 6 months comes down.
If you have any assets that could be liquidated for creditors you should look into converting them into exempt assets that creditors can't touch.

For example, 401k and IRA's generally can't be touched. Life insurance, tools of the trade, stuff like that. You can look up the specific exemptions for your state as well as the federal ones.

Never lose hope...we are here to help you spiritually as well as with the rules.

It may have taken 15 years to get in this mess, and you won't get out overnight, but believe me once you stop paying and get over the guilt you will feel better about making the decision to take control of your life once again rather than letting the credit cards control you.

[fltoo]

All good advice.

NONE of us expected to be in this position, you are not special! LOL

Check in here every day and educate yourself. What you are about to do is best for you and your family. No need to feel shame, failure, or anything else negative.

You have children and a wife. Be strong, do what you have to do for the family and you will be fine and recovering inside of a year.

Lots of people even have children who gave them problems. You need to deal with problems step by step and day by day.

Don't mean to sound negative here, but stop feeling sorry for yourself and get moving in the right direction. This is not the end, but the beginning of a new life for you and the family.

By the way, as others said, your wife did not commit fraud and you are not going to jail. You just have to wait out that transfer of money. That is all nonsense.

[StuSpenz]

thanks everyone. What you told me was invaluable.

1. My attorney sucks, and it might be time to get a new one.
2. That my CCs' need to be shredded, and then I need to decide whether or not to pay the monthly minimum payments up until bankruptcy.
3. That with student loans, federal taxes, and drawing down on my IRA to get through the next few months, I will still have a substantial obigation at the end.

In truth, bankruptcy is like discharging a very bad loan shark called CitiBank. Without them, and my over-reliance on their credit card to get through some unforseen problems, I would not be here.

What will be worse for me is to sit on the sidelines for 9 months, when I could in fact be earning my way out of this. But without the opportunity to earn a clean slate with Citibank, they would gouge me for years to come.

[ShouldWeFile]

3. That with student loans, federal taxes, and drawing down on my IRA to get through the next few months, I will still have a substantial obigation at the end.

Someone correct me if I am wrong, but I believe your IRA accounts are protected in BK, do not draw on those to pay any debts that you will be discharging!

I REPEAT - do not withdraw any monies from retirement accounts as those monies will be completely wasted in a futile attempt to artificially stay afloat. I would think if it your only option to put food on the table then perhaps you could access those - but otherwise they remain intact and untouched throughout the BK...

[StuSpenz]

Perhaps a bit ingnorant, but how do I survive for 9 months?

I have over $1,100 per month in car mortgags for my kids and wife's cars and still have the unsecured debt service of $2,000.

But my unemployment and wife's salary is only a meger amount oer month. So I am forced to use the credit cards to close out my kids car mortgages or drain my IRA to service the debt. Either way I am screwed.

[keepmine]

Stop paying all unsecured debt.
Next, you and your wife need to find jobs. I know it's easier siad than done but, bk will not help if, you can't support yourself post bk.
Were I you, I'd put bk on the backburner and focus on getting your finances stable. NO sense in filing bk and then, 6 months later somebody gets sick or injured and you're stuck with large medical debt that can't be discharged since you already played the bk card.
If your kids are old enough to drive, they're old enough to work. They need to start picking up the car loans and insurance given the family circumstances.

[tkharvey]

I know this is a stressful time but it's not going to do you any good to freak out. I know, I've been there. IT WILL ALL WORK OUT. My husband and I, like you, always tried to the right thing, Christian, honorable, hard working people. I've come to realize that doesn't exempt us from financial difficulty. It was hard to swallow and not very natural to stop paying our bills (credit cards). This is by far the most stressful time we've ever been through in our twenty one years of marriage. But, I realize there is light at the end of the tunnel for us, and for you StuSpenz, as well!