Possible AP by Chase

[Oblib2345]

We just had our 341 meeting today and everything seemed to go well. After the meeting, our lawyer handed us a paper from an attorney for Chase saying that the were considering filing an AP for a $7500 cash advance that we took out on December 4th, 2008. At the time, we were not considering bankruptcy (kind of living with our heads in a hole) and certainly intended to pay the money back. We took $2500 and paid off other credit cards (including other chase cards, which is why we did the cash advance because you cannot transfer balances between cards from the same company). The other $5000 I put into a stock account in a vain attempt to make some money (pretty stupid, I know. As I said, we were not thinking clearly. ) When it became clear in Feb that we would be filing bankruptcy, we took the money out of the stocks (about $4708 then) and used that to pay for the attorney, car repairs, a fridge when ours died on use, etc.

What Chase has offered is eithera lump sum of $6000 or Stipulation in the sum of $7500 to avoid the AP. My question is what would you do? I haven't had a chance to talk to our lawyer yet, I will be calling him about it tomorrow. My thought is to ask them to agree to be paid back the $5000 we used from the stock account and forgive the $2500 we used as a psuedo-balance transfer. They haven't filed the AP yet, but the letter (of course) makes it sound like they certainly are going to. Do you think they are just trying to get something out of me and will not do anything, or should I try to work out a settlement. Thanks for any advice

[music12]

even though the cash advance appears to have been more than 90 days before filing, it's a rather large sum, and even though there is no presumption of abuse there, they just might think they would be successful. however, at this point they have absolutely no way of proving that you were already thinking of bk in dec 08, and you say you realized it only in feb 09. without facts against you, and without a presumption in their favor, i don't know how they would be able to actually file an AP. however, i have never seen an AP complaint (and hope i never do!!).

your lawyer would be able to tell you whether they would be able to file a complaint even if they have no way of proving your cash advance was an abuse.

i think you should lower your offer to them. it is my understanding that if they get nothing from you, they would write it off as a loss and get a tax benefit from that. i don't know what the percentage would be - it should be whatever tax bracket chase is in. if it's say 33%, then if you pay them nothing they really get around $2,500. i think you should start by offering no more than $2,500 (they would still get the tax benefit on the remaining $5000) and see where it goes; your attorney would know better.

right now they have no idea what you used the money for. maybe it's not a good idea to tell them you put it in the stock market trying to make money - they might try to use that against you somehow.

[PoorGrammyinBK7]

I really think they are bluffing, making an attempt to get something out of it. Doesn't sound like it would be worth their money to fight you in court for this, especially since its been such a long time - unless there is something you are not telling us.

[Oblib2345]

Thanks for the advice. I'll talk with my lawyer tomorrow, but I kind of was thinking along the same lines that they are just trying to see if they can get any money out of me. I don't think there is anything to add that I didn't post above, I basically did it to pay off some of my other chase cards, make a (stupid) effort to get enough to pay my debts (might as well have taken it to the casino ), and get an emergency fund (which, of course, quickly went away to pay bills and other necessities).

[MrSmithster]

using CA to buy stocks, then using, what, half the proceeds to file? wow, that would worry me in that short of time frame(did you receive a large tax return also?). CA fee plus interest over time, plus fees to buy/sell stock would mean you would need to get an awful high return to come out ahead. if your lawyer isnt to sure, i would keep quite and offer $2500(if you can afford it), see what happens

[ecsclb1724]

do you have receipts for the larger things like fridge, car repairs and how much was your attorney?

[mike258]

I got the exact same letter from Chase regarding a large balance transfer I did in December. They are in a clear violation of the automatic stay by asking for $6,000. Stick your attorney all over them.

[keepmine]

There is no violation here. They are allowed to contact the debtors attorney.

[frogger]

saying that the were considering filing an AP

Typical collection wording. Notice that did not say that they were filing, they were considering.

Could, considering, possibly, might, perhaps, etc......

All wording used by agencies to make a threat without making a threat. If they told you that they "were" filing an AP, then they would have legally been required to, or they would have violated the law.

[whipster1]

Remember they have to prove it, and if not your atty gets his fees paid by them. They are bluffing most likely.

[mike258]

There is no violation here. They are allowed to contact the debtors attorney.

But they are looking for payment during the automatic stay.

[Oblib2345]

We do have receipts for the fridge (about $800), vet bills (~$450), and car repairs (~$1000). The lawyer was $1100 and the two debt classes were $100. We used the rest of the money while my wife was in and out of the hospital for the last three months of her pregnancy. (I believe she was admitted 3 times between the end of december and april before the baby was born). They did send the letter to my lawyer, so I don't think they violated the automatic stay. It just said they were considering filing an AP based on the information, but nothing has been done yet.

[Oblib2345]

using CA to buy stocks, then using, what, half the proceeds to file? wow, that would worry me in that short of time frame(did you receive a large tax return also?). CA fee plus interest over time, plus fees to buy/sell stock would mean you would need to get an awful high return to come out ahead. if your lawyer isnt to sure, i would keep quite and offer $2500(if you can afford it), see what happens

I believe that the cash advance fee was limited to $50 dollars regardless of balance and the interest rate was fixed at 4.99% for the life of the balance (at the time, of course). This was before the credit card companies kind of started going crazy. Our tax refund was about $2000, we used that for some new (to us, at least) baby items. We also had to do a repair to the bathroom floor because the toliet seal cracked and rotted away the floor boards. I think that was around $600 - $700, I would have to find the receipt.

[OhioFiler]

We do have receipts for the fridge (about $800), vet bills (~$450), and car repairs (~$1000). The lawyer was $1100 and the two debt classes were $100. We used the rest of the money while my wife was in and out of the hospital for the last three months of her pregnancy. (I believe she was admitted 3 times between the end of december and april before the baby was born). They did send the letter to my lawyer, so I don't think they violated the automatic stay. It just said they were considering filing an AP based on the information, but nothing has been done yet.

I'd say let them file the AP THEN you can negotiate with them if they really do it.

[liz417]

I'd say let them file the AP THEN you can negotiate with them if they really do it.

I agree, call their bluff. Let them spend the $$ to file an AP, then negotiate at that point. Remeber, the ball is in their court, they need to prove Fraud.

Good Luck!