Using credit cards before 341?

[BBW]

Is it a bad idea to use a $0 balance card that is still open between filing and my 341, or between filing and discharge? I don't plan to but I'm short on cash until my attorney is paid off.

[justbroke]

You should not do this (period).

[BBW]

I kind of guessed that, but what is the adverse affect?

[CCsAreEvil]

I agree with what justbroke said. If you are planning to use a credit card in which you are wanting to include in a BK, they can call "abuse" and your case will be in jeopardy of getting dismissed.

Basically, any accounts you are including in the BK are "history"... not to be ever used again. In my case, I stopped using my credit cards 4-5 months before my actual filing date.

[justbroke]

I kind of guessed that, but what is the adverse affect?

While much of this is just anecdotal, here's what will happen..

1. It is highly likely that the account is closed or will be closed shortly after filing.
2. The creditor could file a complaint with the court as to dischargeability. (Unlikely)
3. The United States Trustee could find out and seek to dismiss your case for bad faith
4. Or, absolutely nothing happens!

I accidentally used two of my cards after filing, but was also making payments. I thought I could keep them, but they were shutdown (canceled) within a few weeks anyhow by the creditor. Nothing ever came of it.

If you're looking to make significant charges, this can become problematic and the creditor may seek the Court's and/or UST's assistance with dealing with you.

Suffice it to say that it's not a good idea to incur debt in the period where you are in active bankruptcy. You are in active bankruptcy from the time you file, until your discharge.

I don't plan to but I'm short on cash until my attorney is paid off.

This part I'm confused with. Your attorney should ALREADY be paid off prior to filing! If you're paying your attorney after you filed your petition... something is very very wrong!

[BBW]

I agree with what justbroke said. If you are planning to use a credit card in which you are wanting to include in a BK, they can call "abuse" and your case will be in jeopardy of getting dismissed.

Basically, any accounts you are including in the BK are "history"... not to be ever used again. In my case, I stopped using my credit cards 4-5 months before my actual filing date.

I said $0 balance cards after filing. I mean they aren't included in the bk, if I made a charge it would be paid off.

[BBW]

While much of this is just anecdotal, here's what will happen..

1. It is highly likely that the account is closed or will be closed shortly after filing.
2. The creditor could file a complaint with the court as to dischargeability. (Unlikely)
3. The United States Trustee could find out and seek to dismiss your case for bad faith
4. Or, absolutely nothing happens!

I accidentally used two of my cards after filing, but was also making payments. I thought I could keep them, but they were shutdown (canceled) within a few weeks anyhow by the creditor. Nothing ever came of it.

If you're looking to make significant charges, this can become problematic and the creditor may seek the Court's and/or UST's assistance with dealing with you.

Suffice it to say that it's not a good idea to incur debt in the period where you are in active bankruptcy. You are in active bankruptcy from the time you file, until your discharge.

Ok that's what I thought. I was just thinking if a tire blew on my car and I needed to drop $200 instantly. Or something like that.

[CCsAreEvil]

I said $0 balance cards after filing. I mean they aren't included in the bk, if I made a charge it would be paid off.

Ok. I didn't understand you correctly. I don't think there are any issues with a card which you did not include in the BK.

[BBW]

This part I'm confused with. Your attorney should ALREADY be paid off prior to filing! If you're paying your attorney after you filed your petition... something is very very wrong!

Nope, I still owe him $7XX. Due in 3 weeks, the morning of my 341. I thought it was a little odd too since everyone on here had to pay prior to filing. I gave him $1400 prior to filing (including filing fees) and he said he'd take the rest at the court. He's a trustee himself so I'm sure it's all legit.

[justbroke]

Nope, I still owe him $7XX. Due in 3 weeks, the morning of my 341. I thought it was a little odd too since everyone on here had to pay prior to filing. I gave him $1400 prior to filing (including filing fees) and he said he'd take the rest at the court. He's a trustee himself so I'm sure it's all legit.

Legit... no, it's not. He's an "unsecured" creditor just like the rest of them. You paying him $700 is a preferential payment! This is why every attorney that I know of requires full payment prior to filing a Chapter 7 case!

I think he's just taking advantage of the fact that he's a panel Trustee.

Or, you're in one of those rogue States. LOL (In any event, I'm pretty sure it's not above board. Perhaps MSbklawyer or one of the other attorneys will pop in.)

[BBW]

Yea I thought he would become an unsecured creditor. But It says it right here in the filing. 2016-B & 2017-1 Statement
"prior to filing this statement the debtor(s) have paid. $1,001.00" "the unpaid balance due and payable is $749.00" "the source of payments to be made by the debtor(s) to the under-signed for the remaining balance, if any, will be from earnings, wages, and compenstation for services preformed". So it's included in the filing, I printed it right off PACER. It looks legit to me.

[justbroke]

Yea I thought he would become an unsecured creditor. But It says it right here in the filing. 2016-B & 2017-1 Statement "prior to filing this statement the debtor(s) have paid. $1,001.00" "the unpaid balance due and payable is $749.00" "the source of payments to be made by the debtor(s) to the under-signed for the remaining balance, if any, will be from earnings, wages, and compenstation for services preformed". So it's included in the filing, I printed it right off PACER. It looks legit to me.

Okay, okay. Just strange to me. Must be some local rule (cause 2016 is on compensation), because I've never seen this before. But, alas, me seeing it means nothing!

Best of luck to ya!

[BBW]

I originally was thinking the way you are. And figured maybe it was because I was paying in cash. But after he filed I printed everything he had filed and our payment arrangements were right there on the 2016-2017 Statement.

I just googled it (im in NY) and I found things in CA and TX related to paying after filing. One TX attorney's site said "The number of proposed installments may not exceed four (4), and the final installment must be paid not later than 120 days after filing the bankruptcy "

[justbroke]

You may be the first I've read about. I read FRBP 2016 but don't see anything specific. I don't know why any attorney would do it...

(Usually, the installment is for the filing fee itself, and that's payable in 4 installments. However, I just haven't read until now, your case, where an attorney allowed post-petition "attorney fee" payments in a Chapter 7.)

So I looked, as you did and found this...

If you are going to file a chapter 7 case, lawyers can only accept installments for the attorney's fee prior to filing the chapter 7 case. As noted above, if you have not fully paid the agreed fee prior to the filing of the bankruptcy case, your lawyer has to waive the balance in order to continue representing you because the lawyer cannot be your creditor. A lawyer who seeks to collect the unpaid portion of the prepetition attorney's fee after the chapter 7 case has been filed is violating the automatic stay, which means they can't pressure you to pay them the balance of the prepetition attorney's fee after you file.

If we determine you should file a Chapter 7, all fees and costs must be filed before we file your case. The reason for this is, upon the filing of your case, we become a general creditor and are unable to request payment of any outstanding fees and costs.

From a Louisiana law firm http://www.louquelaw.com/faqbk.html

[BBW]

Hmmm. That takes me back to my original theory that I didn't have to pay it. Not that I would do that. There's no way I would mess with my bk attorney, but I didn't think I was legally obligated to pay.