Charges before stopping payment...

[sirius]

I'm in a situation where I'm uncertain or not whether I'm going to end up filing. I'm not working, but my family helps me out currently. I've filed for disability, but don't yet know the outcome. If denied it could take quite some time for approval upon appeal.

I've been making my minimum payments with the family support, but using the cards for gas and food.

Even if I get disability my income may be so low that it will still be worth filing, but I haven't made that decision yet so I just keep paying. I will probably decide either way relatively soon. I should be finding out disabilities initial answer and if denied I will almost certainly have to stop paying at that point.

Whether or not I file BK at that point I'm not sure of either since some people said not to file as my disability income would be exempt, but I'm worried about any judgements I may have against me at that point and my bank account being in jeopardy.

So that's the background. Now to my topic heading. I'm in a bit of a limbo area here right now, but want to know what is ok to still charge? I need tires for my car and some other purchases. I know about the 90 rule before filing, but I may not even file and if I do it may be further down the road. What's the rule on charges before stopping payment regardless of whether you file or not? It seems like it would be criminal for someone to make a big purchase right before not paying. I don't see how people could do something like that.

Anyways, thanks for reading. It's just that my situation is so uncertain that I don't know what to do and I don't want to do anything to make it worse down the road.

[mamaluv]

This is just my personal opinion but I wouldn't charge things if you have no intention of paying them back-regardless of BK.

[sirius]

This is just my personal opinion but I wouldn't charge things if you have no intention of paying them back-regardless of BK.

Right, but my intention is to pay them back. I thought in my post I was clear that I want to avoid stopping payments and possible BK.

At this point my minimum payments usually cover everthing I charge and my interest charges, so I'm not racking up debt.

Like I said though, I have need for a couple bigger charges and am concerned about that.

Regardless of any moral issues I'd like to know what's to be expected in this scenario. In fact, I'm curious about it in general and not just my situation.

[frogger]

If you know you're going to file, you need to quit using them.

[sirius]

If you know you're going to file, you need to quit using them.

Sheesh.

Once again, I don't know that I will need to file.

[HakunaMatata]

I have approximately $20k in outstanding debt that I've balance-bounced at 0% for three years. Charges have not been made to any of these cards. However, I have one card I used exclusively for monthly purchases (gas, food, basic necessities). This card was treated as a 30 day interest-free loan until my I was recently faced with some financial hits. My attorney isn't concerned with the current charges. He read through my statements and noted not one item is remotely considered "luxury". I asked about the 90-day rule and he assured me I need not be concerned based on the types of purchases that were made (one charge included a tire). He claimed I could file immediately. I haven't made a purchase on this card for approximately 45 days; and, if all goes well, I'll be filing prior to the 90 day mark. Obviously, I won't have evidence of his claims until I breeze through my 341 (<--inserting positive projections!). He has served as a BK attorney for more than two decades and has worked on both sides of the fence...representing creditors as well. I'm putting my faith in his knowledge.

If you are in need of basic items, you're ambivalent about filing, and you're willing to make minimum payments, I don't see how a major problem could develop. From what I understand...worst case...you file, an item is deemed "luxury", and you have to repay the debt.

[sirius]

I've read where they can not only say it was a luxury, but throw the whole case out. My guess is that's for people who really attempt to abuse the system and defraud the creditor.

I'm also wondering how this issue affects you if you just stop payment, but don't file BK?

[lrprn]

I've read where they can not only say it was a luxury, but throw the whole case out. My guess is that's for people who really attempt to abuse the system and defraud the creditor.

Yes - complete dismissal is saved for the worst abuse offenders.

In your situation, if you use your charge cards close to filing (within 90 days), then you take the risk that the cc company will file an objection and try to prove that you made the charges with no intent of paying them. If the creditor can prove it to the court's satisfaction, then the charges you made (not the whole amount owed) can be taken out of your discharge and you would still owe that amount after bankruptcy.

I'm also wondering how this issue affects you if you just stop payment, but don't file BK?

If you just stop payment on your non-secured debts, what happens depends on how "judgment-proof" you are at that time. At the very least, your phone is going to ring a lot (but cease and desist letters can reduce that). At the worst, the creditor takes you to court and gets your non-disability income garnished. How much they can take depends on your state's garnishment laws. Creditors may also go to court to put liens against any secured assets you may have.

If you stop payments on secured assets, then the assets will eventually be repossessed or foreclosed by the creditor.

[sirius]

Yes - complete dismissal is saved for the worst abuse offenders.

In your situation, if you use your charge cards close to filing (within 90 days), then you take the risk that the cc company will file an objection and try to prove that you made the charges with no intent of paying them. If the creditor can prove it to the court's satisfaction, then the charges you made (not the whole amount owed) can be taken out of your discharge and you would still owe that amount after bankruptcy.

I would imagine I would be well over the 90 days since if I stop payment and I'm pretty judgement proof I would be able to wait quite awhile before filing and some people said maybe I shouldn't file at all.

This just seems odd though because what if someone really racks up there cards and stops payment and never files. It seems like they should have some consequence to pay. They get away with it just because no 90 day rule ever came into play because they never file BK?

Also, some sites I was reading mentioned that they look back much further than 90 days?

If you just stop payment on your non-secured debts, what happens depends on how "judgment-proof" you are at that time. At the very least, your phone is going to ring a lot (but cease and desist letters can reduce that). At the worst, the creditor takes you to court and gets your non-disability income garnished. How much they can take depends on your state's garnishment laws. Creditors may also go to court to put liens against any secured assets you may have.

If you stop payments on secured assets, then the assets will eventually be repossessed or foreclosed by the creditor.

I guess money from my family would be the only thing I would have that could be considered income. Here's more info about my situation from another post I made:

http://www.bkforum.com/showthread.php?t=44691

Right now, I don't receive the money directly. If I stop payment I'd like to still be able to receive some support. Right now I get 600 a month. I'm wondering if this amount is low enough to be protected as the other thread mentioned being under the 13K taxable amount.

I have a car that has about 5 more months of payments left. I plan on paying it off. Can the other creditors go after my vehicle? That would be the only major assett I have. I don't have any property or other cars or high ticket items.

Thanks much to everyone. This is a really tough situation.

[OhioFiler]

It's obvious you don't have the means to pay your credit card debts. I'd stop using them. If you need new tires ask mom to loan you the money.

[debtmonster]

I used 2 of my cards AFTER I filed with full intentions on keeping and paying on the cards. I used the cards for food and gas for my cars. Both were under $100 in charges.

So far I haven't heard anything. One was for Chase and the other was for a Bank of America credit card.

Can these people make a stink? These charges were all made between the time I filed and my 341. It's now over a week past the 341 and I haven't received any letters or notifications from the court or my attorney.

If somebody objects, how do you find out about it?

[fheenix]

I'm also interested. I put $100 on one card and $90 on another for tires, and $20 at the pharmacy for prescriptions. I considered these emergency items BTW they maxxed out my cards. I can't pay anything this month. I am hoping to file 40-70 days from now. Should I send some money to cover these expenses next month, even though late?

Thanks