need advice in California please

[fheenix]

Hello,

I am new to the forum and this is my first post, so I hope I have it in the right area.

I am in dire straights right now and don't know what to do. I have read a lot here already but need to ask/clarify a few things. I am very worried as I can't make ends meet anymore.

I was terminated from my job October 2008 and am on unemployment (in California) which brings in about $1600 a month. My car is maybe $2000 (paid for), I live in a travel trailer (maybe $2500 also paid for), and my rent is $675 a month plus electricity of about $100. I pay COBRA health plan of about $375 a month as I have rheumatoid arthritis and am dependent on the meds I get covered by my plan to keep walking (my meds would cost about $2200 a month - Humira).

I have six credit cards and a Dell account (secured I have learned here). My Dell account is about $1800, my credit cards make a total of about $23,000 unsecured. My only assets are a couple of laptops, three cameras, some lenses, my car, and trailer.

This month I have run out of money, I can't pay my bills at all. I realize I have to file a chapter 7. I have flat tires on my trailer, a dead battery and no money.

Here are my questions please;

1) I have tried not to use the cards in the last 90 days but when I downloaded the histories I see slight use on some of them (the highest was a Dell payment of $736, several months ago). I have made all my minimum payments up until this month. I have not run them up excessively (except for one in the next question). My question is can I file now? Do I have to wait for a few months of non-use? I don't want to have collectors calling me every day.

2) One card I have used to live on quite a bit. It has $1800 charges on it. I would like to keep it for the future, just this one card. I have some camera lenses and a couple of cameras (that are not associated with my Dell account) that I could sell to knock this debt off. Once I have it paid off am I correct in believing that I don't have to include it in my filing?

I thank you in advance for any responses most sincerely.

[killinstinct]

I'm not sure, but why do you think you need to file now? Sounds to me like there's nothing they can take from you. You may be "judgement proof" depending on the exemption laws in your state. I would research that.

If you file BK, all of your credit will vanish. EVERY credit card will be closed. I promise, even if you have no balance. The companies monitor filings and will close your account. You have to learn to live without credit.

Good luck on your venture. This forum is full of helpful people and information. Most BK attorneys offer free consulations, you may want to hit up at least three different ones....

[fheenix]

My concerns are that my unemployment is about to run out. I can get a job that pays less than I am getting now (@ $10 hr) and I concerned about wage garnishment. Also I do not wish to have liens placed on my car and trailer as I am considering selling them and relocating.

Are my concerns legit or am I stressing over something that might be resolved better some other way?

And I thank you for the "judgement proof" idea and am looking into that also.

[keepmine]

My concerns are that my unemployment is about to run out. I can get a job that pays less than I am getting now (@ $10 hr) and I concerned about wage garnishment. Also I do not wish to have liens placed on my car and trailer as I am considering selling them and relocating.

Are my concerns legit or am I stressing over something that might be resolved better some other way?

And I thank you for the "judgement proof" idea and am looking into that also.

It will be many months if not a year or more before you get sued. If you get sued, you'll have plenty of time to file bk.
Were I you, I'd focus on getting a job and getting your finances stable. Once you default on those cards, look for the creditor you're trying to stay current with to close your account and jack your interest rate.
Right now, bk is premature.

[fheenix]

Thank you for your reply; knowing I can't "save" a card helps me in my future plans immensely. I have also talked with several different BK lawyers and found one that I like, and she answered so many more questions for me. Thanks also for pointing out that I have time, that I need not rush into it. I see little option but to walk this path, and I shall start putting money aside for the lawyer down the road. I agree getting back on my feet is more important than going through this right now, which will just cost me more money I can ill afford to pay. I think sometimes not knowing leads one to imagine all sorts of bad scenarios. I was in free fall panic a few days ago, but I feel less stressed now and am grateful for the advice I have received here.

[Jumper]

fheenix,...your BK lawyer is right,...you have time, no need to rush...

I also live in California, and will file Ch7 in just a few days...I've learned a lot over
the past many months,..hopefully something I've learned can help you too.
Curiously, I also am on Cobra, and have a relative of RA..

Anyways,...one thing on our side is that California has one of (if not *the*) most
generous bankruptcy systems....In a nutshell, and generalizing for a moment,
if all you own is less than $20K in value, you get to keep it all (if you are filing Ch7). Your debt load is nowhere near mine, lol...so you can relax a bit.
Here's why,...I won't go into details, but I had to switch from one BK attorney
to a different in mid-stream. I was *current* on all my accounts and was
concerned about staying that way right up to filing date. As it happened,
I stopped paying CCs for about 4 months now, and though my phone has
been ringing off the hook, the creditors have done nothing else but attempt
phone contact, leaving me 4 months to prepare for the filing. However,
I was sure I was filing...if you aren't sure if you're going to file, then you may
want to keep current. Another thing to consider, since you mention you may
be out of cash,...is that by stopping to send in CC payments, you can redirect
that money to pay for the attorney fees, which should not exceed $2k. (one attorney was charging $1800, and this was in LA)
Re-reading "killinstinct" and "keepmine", they make very good points...you may want to explore your options.

[killinstinct]

Just remember that patience often pays off. The worst they can do is call and send nasty letters, but it will typically be at least six months of non-payment before creditors take any sort of legal action. I went 90 days and just got phone calls. Several creditors did nothing. I think they're swamped right now with the current economic situation. Most lawyers will tell you to stop paying your cards and put that money in savings or pay for other necessities. People worry about their credit score, but that's just kind of silly when you know you're filing BK.

[fheenix]

Jumper thank you for your insight. Unfortunately I have no choice but to stop CC payments this month, I have to pay my Cobra and keep my meds coming in. My health has to be my number 1 priority. With my RA a big trigger in my flare ups is stress.

I have been advised to get a new bank account, as with the bank mergers I now have several CC's where I bank. An interesting point she brought up is that even if I do pay off the card I have been ringing up, the payments could be taken back and redistributed amongst other creditors. She said it would be best just stop paying them all, and she'd just negotiate payments with the one I rang up so I'd pay maybe half, say at $50 a month or abouts.

The lawyer I liked best is actually the cheapest ($1400+$400 filing and credit counseling =$1800), and she talked to me in depth over the phone. Others wanted me to come into their offices in San Francisco, and they charged more for their office space IMO, and would have inconvenienced me going into the city, with gas, time, toll, parking fees, etc.

I realize I might be judgment proof but want to discharge these debts. With the economy I am considering moving, and would have no choice but to sell my trailer (as I have no tow vehicle) and use that money for initial rent elsewhere. And I don't want people dogging me, I want closure. I am looking ahead at getting past this and a fresh start.

BTW, do you answer the phone? Am considering getting a prepaid for friends and family.

Good luck on your Ch 7 Jumper!

[killinstinct]

I ignored the phone calls until I knew when I was filing. Then I told them and most quit (except Capital One, who demanded a case number). However, I told them to quit calling and complained to the FTC and THEN they quit. By then I had my case number though, ha ha!!