What to do with this card.

[eventsdj]

We are meeting with Atty. on Tuesday to get things rolling to file cpt.7.
We are current on everything, but need to let it all go this month. I am on bald tires, gas leak in van, daughter needs a reading tutor TODAY, all things I can't do cuz of our cc debt.

Heres the question.. I have a best buy card that the minimum is $22. I've always sent more to this one, because it was interest free until Jan. 2010 (in 4 months) and if I default, the interest ($1300) is automatically added on.
Can I just send the minimum to this one to keep it current incase something with the BK falls through?

THanks!

[keepmine]

Your are required to list all your creditors.

[eventsdj]

I realize this, and have them listed... what I need to know, is it ok to send them the minimum of $22, even though I'm going to not send anything to the others, and I have them listed for BK.

THanks

[justbroke]

I realize this, and have them listed... what I need to know, is it ok to send them the minimum of $22, even though I'm going to not send anything to the others, and I have them listed for BK.

If you are filing soon, there is no reason to pay any credit card at all. You're posting about bald tires, and leaking gas, and tutors. You need to concentrate on the health and welfare of you and your dependents.

Now, it is technically a preference when you pay one creditor over the others. While the Trustee may not go after $22, you just shouldn't do this. The bankruptcy code is specific about this because debtors tend to prefer making payments to one creditor over the other. I don't think you'll get into any trouble, but, again, what you write is the definition of a preference in the bankruptcy code (11 USC 547).

(Justbroke's Study Notes: While the code does in fact define even a $2 payment to an unsecured creditors as a preference, the Trustee may only avoid such a preference if it's more than $600 (11 USC 547(c)(8)). In this post, the debtor would like to pay $22 to a single creditor, while not paying any other unsecured creditors. This is a preference, but is not an avoidable preference.)

[music12]

well, if it's not an avoidable preference, then it doesn't matter, does it? you can pay up to $599 to any creditor during the 90 days before filing and nobody can do anything about it (unless it's an insider).

[justbroke]

well, if it's not an avoidable preference, then it doesn't matter, does it? you can pay up to $599 to any creditor during the 90 days before filing and nobody can do anything about it (unless it's an insider).

That's what I wrote. The Trustee can't do anything... but is it a prudent use of the debtor's money? To make payments on a credit card that's being discharged?

[music12]

That's what I wrote. The Trustee can't do anything... but is it a prudent use of the debtor's money? To make payments on a credit card that's being discharged?

it might be prudent if he is doing it "in case something with the bk falls through."

not that i know what could fall through...

[leena]

In all liklehood they would no longer extend any credit even if the BK fell through, which is highly doubtful. Keep your money.

As to the preference thing, it does not hurt you. The trustee can ask for money back *from the entity you made the payment to, not you* if the payments over the 90 days before filing were more than 600 buck (or 599, whatever!). However, that does not harm you in any way.

JUst forget the BB Card, now that you have filed, it is gone.

[justbroke]

it might be prudent if he is doing it "in case something with the bk falls through."

True, and hence I earlier indicated "if you are filing soon". In any event, if they were to file, they'd stop paying anyhow. If something falls through with the Bankruptcy after filing, all past interest, payments, and collection activity resumes. So, they would be in the same situation as not paying it... unfortunately.

I think for $22, this really isn't that much money, so my point is really moot when it comes to spending it on things that really matters.

[eventsdj]

Thanks for all the awnsers... I was thinking to stay current because of the large interest that will be added on if we default by not paying, and its due next week, before we file.

Also, we have a large BOA loan that I pay $600 a month on, and we are current. But, to this point, we have been current on everything.
Thats not preferential, right? because we are current on everything?
This will be the month we let everything go, and I'm getting nervous because there all due next week.
Thanks

[justbroke]

Also, we have a large BOA loan that I pay $600 a month on, and we are current. But, to this point, we have been current on everything. Thats not preferential, right? because we are current on everything?

If you are filing in the next 90 days, any payments to an unsecured creditor aggregating over $600 in that period, is what's called an avoidable preference payment. It doesn't matter that you are paying other creditors... it's because you're technically insolvent.

It is really not your concern, as the Trustee goes after the payee (the person you paid), and not you! The issue is, that you would just try to avoid being in that position anyhow.

Please seek advice from your attorney on paying your unsecured creditors next week.

[cismith54]

I am in the same situation. I will be filing soon but am presently paying HSBC (Best Buy) as our same as cash situation. My attorney also indicated that he wasn't sure if this account is truly unsecured as we used it to purchase a washer, drier and a flat panel. When I called HSBC to advise of the BK the representative gave me an address for their Return Documentation to: HSBC PO Box 15521 Wilmington, DE 19850. This statement led me to believe that possibly this is a secured debt. What are your thoughts on this? I really need this answered as the payment is due soon. Any info that you can provide will be greatly appreciated.

[StartingOver08]

Since your card is Best Buy and you purchased appliances and a flat panel (TV, right?) - they will say they have a Purchase Money Secured Interest (PMSI) in the items. You probably will get a letter, like many of the posters here, from Best Buy asking/demanding payment in full. This letter comes after the BK filing! So be prepared to tell them to come pick up their goods.

From others on here (search for Best Buy) it seems if you call their bluff they do not come to pick up the stuff!