New to the board with a lot of questions.

[frmrdwn]

Curious too. Would paying those advances off, but not other debts, be viewed as preferential treatment?

[whipster1]

Is waiting a full year after the cash advances I took the general BK Forum consensus? If so, is it to too late to pay back the advances?

Any payback of one unsecured creditor over another is preferential. You can file a 13 without problems immediately but a 7 would have some big issues related to those advances. 6 months waiting period at least if you plan on a 7.

[TITUS00]

How safe am I after 6 months? Do I need to wait a year? I was newly unemployed when I took the advances. The advances are for 9.5K and 4.9K frrm the same bank on 2 different cards.

[whipster1]

Just keep up the payments to them and a few other creditors to show good faith. The problem is taking advances without intention to pay them back, and steady payments help to show you did intend to pay them back.

[TITUS00]

It seems that as long as I make payments for at least 6 months I should do all right. I'm really hoping that I don't end up filing. The advances are at 0% interest and hopefully they will eventually be paid back.

[backtoschool]

I would wait six months and make regular payments in those six months and make sure that you do not use any of the money for "luxury" items and you should be fine.

[TITUS00]

There has been a new development in my case. It seems that my business is not going the way I planned. A key prospect that I thought I would be doing business with has reneged. I plan on paying back the cash advances I took in July.

I have some new questions.
Is it 3 months look back as fas as preferential treatment when it comes to paying back an unsecured creditor?
What are the rules as far as paying back a secured creditor (HELOC)?
I am receiving only Unemployment Insurance as income. Can an unsecured creditor put a lien on my home? If so will a CH 7 bankruptcy automatically wipe it out, or will it cost me additional legal fees during the BK to get the lien off?

I am contemplating if I should stop paying my credit card bills as of September.

[backtoschool]

The minimum window for preferential payments is 90 days for a non "insider" creditor (ie a family member or friend). But if you are closing the cards and having them discharged in your chapter 7, it doesn't really matter if it's a preferential payment because the trustee goes after the credit card to claw it back and divide it out equally. The trustee doesn't go after you, they go after the creditor's you paid the money to.

Payments to a fully secured creditor are not preferential, since they are not getting more than they would if you had filed chapter 7 without paying them. (ie, secured creditors get their property back or get paid in full in chapter 7).

A unsecured creditor can file a lawsuit, get a default judgement and put a lien on your home BEFORE you file for bankruptcy. You would be getting paperwork showing that this is going on, and it take awhile, but yes they can do that. Your unemployment insurance is exempt from garnishment by creditors.

I believe you have to file extra paperwork to get the lien removed after you are discharged, but I am not sure....

[whipster1]

I would use up that money over several months, on normal expenses. You can't "un-ring" the cash advance bell by paying them back. Paying them back then filing only takes that money out of your pocket and the trustee will go after it from those creditors you paid, and make your case an asset case...those take FOREVER to get discharged.

[TITUS00]

I agree, I reconsidered that a few hours ago. This whole process is very nerve wrenching.