Looking to file Ch. 7 - Unique situation question -

[2K3SVT]

I have a family of 4 - My wife works - I have been unemployed since July 1 - unable to collect unemployment due to self employment for 4 years. Anyway - we are living on credit cards -- I have made 1 large purchase in the last 3 months for photography equipment trying to start a business - of course it is slow. The majority of purchases are necessary living charges (gas, groceries, clothing for our children starting school).

Another interesting thing is she had surgery to remove some scar tissue from a previous breast augmentation - this was not absolutely necessary but she was able to get a health one visa card -- in her name only and did the surgery in august. I am not sure what will come of this ? We plan to make minimum payments on this as long as possible !!
We have decided due to the past few months and the chance that my pay will be cut drastically - we will be filing Ch. 7 in the future. We are trying to make all our minimums - but it is getting tougher. I am looking at filing after the holidays.

We will be purchasing a car to reduce that payment and letting the SUV go back to the bank in the next couple of months. We still have good credit - therefore we have to use it to get a car loan now. Any thoughts on my situation?
We own a house and hav very little equity - I drive an old vehicle which I will use the exemption of $3,000 -
Not exactly sure of total credit card debt......probably about 50k - most of this is one card (30K) that was used for home improvements over the past 3 years.
This site is great and I have found so much useful information - Thanks for your help !!

[backtoschool]

The plastic surgery and the photo equipment will be seen as luxuries so try to put as much distance between those purchases and your filing as possible. At least six months would be optimal.

If the photo equipment is a lot of money, you may still end up with an adversarial proceeding from the creditor, who will say that you knew you were insolvent when you bought it. This will be very difficult to for the creditor to prove though, but it is expensive to fight in court (around $5,000) and is not included in your bankruptcy attorney's basic fee.

When I had my 341, the trustee scheduled a 2004 hearing and continued the 341 on a couple that had purchased printing equipment right before they filed (three months before). So the longer you wait to file, the better on the photo equipment.

[2K3SVT]

Thanks............. yeah I figured that --- Six months is our goal -- The photo equipment was $2500 -- so not a huge amount.

But if the situation does not get better -- we will be continuing to use cash advances to pay daily living and minimum cc payments.......... I am just lucky I had this much credit and a good credit score before all of this took place.

What about timeframe to stop paying the cc bills.............should I try to pay them for 3-4 months and then not pay them for a few months and then file? I will be speaking to an attorney in the next 60 days......... but input on this forum is always good too !! Thanks

[keepmine]

If, bk is the endgame then stop paying all debt you wish to discharge now. Use those payments you were sending to the cc's for your normal living expenses.

[2K3SVT]

If, bk is the endgame then stop paying all debt you wish to discharge now. Use those payments you were sending to the cc's for your normal living expenses.

But if I do that - I dont want to make it look like I am charging up and bailing out......... I am able to pay the minimums for a couple more months....depending on my employment situation in the next 60 days --

By the way -- how long does it take for cc to shut you off if your not paying.......if you miss one payment.......or is it usually two ?

[2manybills]

I would stop using the cards and stop paying the cards. If you have had a recent cash advance on a card, I would try to make payments for a few months on that one.

As far as how quick do they shut you down, depends, but a friend of mine who has had an Amex for years, says they put a hold on her card the day after due date until they receive payment.

[mgmadara]

As far as how quick do they shut you down, depends, but a friend of mine who has had an Amex for years, says they put a hold on her card the day after due date until they receive payment.

A friend of mine with an HSBC card had the same thing happen to him. He pays in full every month and has a credit score in the 800's.

[2manybills]

You just never know.

[whipster1]

Keep the photography equipment handy and when you file put those charges as "secured" and you are going to surrender back to the company. As far as the medical, I really don't see a problem there...I have never seen a case published about medical charges being seen as luxuries.

[poorold]

If you are current on everything right now and already see you will be filing chapter 7, good for you because you can PLAN for your life after bankruptcy.

If you are not planning to keep your home, you will need to save some money to move. You can do that when you stop paying your bills. I didn't file bankruptcy for almost a year after not paying my bills. My income was drastically reduced, so no I did not save much.

Talk to a good attorney, right now you are in the driver's seat.




whipster1,

"Keep the photography equipment handy and when you file put those charges as "secured" and you are going to surrender back to the company."


If a CREDIT CARD was used, it is generally unsecured. Where are you coming up with this advice? Are you an attorney?

[2K3SVT]

Thanks........yes -- I am trying to be in control of this situation. We are keeping the house -- hopefully I can find steady work and then we will have no problem reaffirming the house and a car. Yeah -- the photography equipment may be sold on Craigslist for cash in hand........if something doesnt happen quick. Either way -- we had a drastic reduction in income - hence the plans for Chapter 7 -- thanks !!