What if I took out credit card advances to invest in the stock market?

[swampwiz]

Back when the market was down in October 2008, I took out some big advances to invest in the stock market. Knock on wood, I have actually made a profit from those advances (I lost my ass on prior assets), although I have been spending the principle down on just living and of course, paying down the minimum debt payments.

I also did some advances which were really just robbing Peter to pay Paul (paying off other accounts.) I would think that they would not be a problem.

[AngelinaCat]

I also did some advances which were really just robbing Peter to pay Paul (paying off other accounts.) I would think that they would not be a problem.

And if I was Peter seeing you come at me again, I would whip out my 20 gauge shotgun and blast you between the eyes.

You have been playing a shell game all along with money you don't have and gambling on the come.

Stop it now, and get a grip on REAL LIFE. What is your income? That is what you have to live on.

[Chowder]

....I have actually made a profit from those advances.....

The math that would substantiate that claim would be astounding.

[swampwiz]

My income in 2004 in the stock market was about $28K, and since then has averaged about $10K. During the head time of the internet bubble, my instantaneous income as a programmer was about $11K per month. I thought I could replicate that (or even just a job making only $40/hr), but after 18 months or seriously trying (I was only somewhat trying before then as I felt that I was flush with cash), I'm just ready to throw in the towel, start living off my 401K and get on with my life.

And yes, I have made money with those advances, even if you consider the interest. Before then I had $42K in a leveraged fund that dropped down to about $7K at the bottom in March. I bought some after the big moves in late September 2008, and then some more right about at the low in March.

I had done a similar thing in October 2002, in which I hocked my new car that was paid in full to invest in a similar leveraged fund, exactly at the market low, and doubled my money (I sold that in 2004, which is why that was such a good year.)

[frogger]

If you took credit card advances to play the stock market, I would question your sanity. Not much difference between doing that and playing vegas......

[backtoschool]

Back when the market was down in October 2008, I took out some big advances to invest in the stock market. Knock on wood, I have actually made a profit from those advances (I lost my ass on prior assets), although I have been spending the principle down on just living and of course, paying down the minimum debt payments.

I also did some advances which were really just robbing Peter to pay Paul (paying off other accounts.) I would think that they would not be a problem.

"Making a profit on the advances" means being able to pay off the advances, and the interest in full and still have a profit. "Making a profit on the advances" does not mean being able to just pay the minimum payments.

If you were truly successful at this, then why are you filing bankruptcy? And if you had to "Rob Peter to pay Paul" then your "profits" could not have been that much money.

In any case, you have a year from your last advance before you can file without most likely triggering an AP from your creditor.

[music12]

i think you have to take a step back and actually look at your finances. if you really made 11K a month during the good times, then it may be hard for you to accept that that's just not happening any more. i know hope is everything, but at some point you have to stop and make some changes in your life to fit what's really going on rather than what's going on in your head. it's tough but must be done.

[swampwiz]

Well, I had a 0% interest card (recently ratched up to 9.9%) to buy $18K of a fund @ $9.20 (which is in the process of liquidation, and has been liquidated so far at levels of $10 to $11), and a 15.5% interest card to buy $11K of a fund @ $5.34 (which was liquidated at levels ranging from $6.88 to $9.10). That fund is now at about $10.7. Those deposits have been in for about a year, so I think I have made money even after paying the interest.

[swampwiz]

I think the last major cash advance was done on Nov 21, 2008. I may have taken about a total of $4K sometime in March, and then let my line of credit that backs up my checking account just bleed off $8K just to live off of. At that point I ran out of cash, and needed to start bleeding off my stock investments. My total debt was about $3K/mo, with about $1.5K for living expenses (included $700/mo rent), so that's how fast I was bleeding off.

[swampwiz]

i think you have to take a step back and actually look at your finances. if you really made 11K a month during the good times, then it may be hard for you to accept that that's just not happening any more. i know hope is everything, but at some point you have to stop and make some changes in your life to fit what's really going on rather than what's going on in your head. it's tough but must be done.

Well, that's the thing. I now do accept that it's not going to happen anymore, which means I won't be able to buy a home, etc. That's why I'm ready to give up now, rather than wait for the inevitable.

[music12]

if you are a programmer, it is my impression that you are still in high demand, especially in the finance industry. are you saying that even as a programmer it has been difficult to find a job?

[Pizza]

OP: Playing the market using a credit card's cash line is like any other cash advance in the grand scheme of things; you owe cash for borrowed cash. Except it's a little worse: you can't keep the profits if you file BK, you have to pay taxes on your profits, and you still owe the credit cards; this is a terrible combination unless after taxes you are able to pay the cards WITH all accruing interest and still have money left over.

Now then, if you have been making payments, that works in your favor. But if you have spent the cash, the balance left on the cards should be supported by receipts for necessities totalling the remaining cash balance. Since you were "just living" on the cash, do you have the receipts or any way of obtaining them? This is the problem with any cash advance: refuting a claim (if it comes up) that you took the cash, blew it or stashed it, then tried to stiff the creditor.

That being said, it's been about a year and you were making payments, so the chance of an objection is progressively subsiding. A suggested timeframe for situations like these is normally two years. What you've basically done is gambling, except you were using borrowed money to play, won, and don't want to pay what you borrowed. Good thing it was the stock market and not the casino!

You will most definitely need to seek the advise of an attorney here. This was a very, VERY VERY bad move and unless you have other substantial debts, you're gambling again with your BK filing AND ruining your credit.

[Pizza]

Addendum...

I still have about $30K in the stock market, which will last about another 6-9 months if I don't get any income or rise in the market. I have a homesite worth $40K or so, which for other legal reasons I must have taken from me in BK (if it would NOT be taken from me in BK, I would owe an extra $92K to the state of Louisiana), so I can't sell that to live on. The unsecured debt is about $120K now (i.e., $50K under water.)

Should I wait until I run out of cash, or can I just throw in the towel now? Perhaps by doing it now, the judge will see that I am not trying to hide anything and really just want to move on in my life?

When answering the specific question about the stock-related cash advances, I didn't notice all these other threads about living with relatives, the stuff in storage or the land or retained stock earnings. It appears that with all of this bouncing around and lack of assets, you could successfully shove off the BK date. KEEP those receipts, though. Be able to show where that $30K is going. If you can I'd save the receipts and file in six months to a year with the help of an attorney.