Will I Get an Objection?

[Broke1]

My fiinancial situation is now out of control and I'm considering bankruptcy. My situation is as follows: I am a student and have been living off of savings and rental income until April of this year. I had about 10k in cc debt that was at a 2.9% fixed rate. I am still paying on it. In May, I encountered a legal problem and incurred large legal bills. I charged approximately $8k on a credit card that had no balance. In July, I put another $3,500 (legal fees) on the same card. In June I took out $4,500 on a convenience check (different card that had no balance) with a 1 year 0% APR. At the end of July I put another 4,500 (legal fees) on another card.

My plan was to continue to use my savings (which is now nearly gone) and income that my wife was earning from her job to make monthly payments. In August I wanted to refinance or sell my house in order to payoff this new debt. As it turns out, I lost about $50k in equity that I thought I had (big down payment and 5 years of mortgage payments). A couple realtors told me my area was hit hard in the housing market and that I will only get what I owe on the mortgage plus enough to cover their fee. The bank won't refinance due to the equity disappearing. I'm current on all bills and the mortgage, but that will soon be ending due to the said reasons and I'm having a difficult time finding employment. The income from my wife will leave us about $300 short of the mortgage, cc bills and our minimal living expenses.

Will the CC companies object to my petition since I was not working at the time of the charges this past summer? I had a good faith intention to pay the bills, but all the equity in my home dropped out and left me feeling gutted. My wife is working, but all the CC's are in my name and it is my debt.

Any advice will be appreciated.

[AngelinaCatHub]

Need more info. Are you willing to leave your house?
Can you pay a bit of "earnest money" towards the CC's?
How long can you hold out before you must file?
I assume C7 not 13?
So give us some info.

BTW did you win, lose, or draw on the lawsuit?

'Hub

[aljohnson007]

If all the debts are yours alone, depends on what State you are filing as there could be some assest protection options.

[Broke1]

I am thinking of chapter 7, especially due to my unemployment. In my state we can get a 20k exemption on home equity, so I think I'm covered there as the realtors and the new county tax appraisals are only approximately 3k over my current mortgage balance. I prefer not to leave the house because I have to live somewhere and the mortgage is about the same as rent would be. The house is solely in my name and I'm a newlywed. The debt is exclusive to my cc's and she is not on the accounts.

I can hold out until January or February, and that is really pushing it. That would put me in the 6-7 month range since the last major charges were in July, $4.5k and $3.5k.

How much "earnest money" are you talking about? I've never payed late or missed a payment. Recently, some of my rates got jacked due to the debt ratio which leaves me a bit bitter based on my payment history. I prefer a fresh start and not pay anything if I don't have to, especially since I'll be taking a big hit on my rating and I'm just tapped out at this point.

The legal case is an ongoing saga with no economic benefit/ramafication.

[OhioFiler]

While you were unemployed you took $20,500 in cash advances on your credit cards. I'd keep paying those for several more months.

[Broke1]

While you were unemployed you took $20,500 in cash advances on your credit cards. I'd keep paying those for several more months.

Only 4.5k was a cash advance. The rest were charges for legal fees. My intent was to pay, but my equity vanished in my house. So a refinance or a sale won't bring in any money,

[shabam]

Only 4.5k was a cash advance. The rest were charges for legal fees. My intent was to pay, but my equity vanished in my house. So a refinance or a sale won't bring in any money,

You should be okay since at the time you took the cash advances and made the transactions, you were not insolvent. A creditor could possibly pursue you if they thought that while you were unemployed, you had no means of paying them. To be on the safe side with those amounts, you will probably need 6 months worth of payments between them and the date of filing. Not a concrete rule but will definitely help prevent an AP being filed by a creditor.

[whipster1]

Hold out for a few more months and pay token payments to the cards. By token payments I mean 10 or 20 bucks, nothing more.

Time is your friend. Change your phone number now.

[DeadManCrawling]

Time is DEFINTELY your friend.

You have not been sued. Even if you were, it would be months before anything came from the suits.

Keep paying the token payments, 10-20 bucks, as long as they accept them. If you can hold out for a year, you are golden.

If you are sued before then, answer the complaint with affirmative defenses, arguing for proof of debt, contract, signatures, etc.

This will buy you more time.

Every month that passes makes it less likely that a creditor will prevail in an Adversary Proceeding. You can drag this out for a very lng time, until you are safe.

Years, sometimes.

Then file.

We are approaching three YEARS of nonpayment. I believe, based on this, that no unsecured creditor has a leg to stand on. Except perhaps Cap 1, who got a judgment against my wife within 18 months. Even that probably will not stand.

Good luck!