More ?s.. you are all so fantastic!

[coolmom04]

Thank you all so much!! You are helping me feel better about a lot of things, but I'm managing to get stressed out about a lot of other things..

For instance,
1) Last month, I withdrew a total of $700 in cash advances to pay for some other things.
2) I charged about $300 (from what I am reading, we come under the "questionable" amounts of $500 in charges and $750 in cash advances 90 days before filing. Is that correct?
3) We pay my MIL $100/month that she doesn't claim as income.
4) What we pay each month vs. what the allowances are about right on when averaged out, but our bank statements show things that we probably shouldn't spend money on... like eating out. How much is allowed for eating out?? I keep trying to find all this information on my own, but I slept only 3 hrs last night reading and reading and reading and getting myself even more freaked out and nervous. I have four kids (3 of them are ages 3, 1.5, and 5 months!) so I don't get much time during the day to research either.
5) My husband has his account direct deposited into four different accounts. He has one checking that is used to pay for our vehicle and one credit card, preschool, and security system. We have a joint account for all our other stuff - like personal care, diapers, household stuff, all the other misc. stuff. We have another joint account JUST for groceries. Then we have MY account that he is not on for my monthly allowance. Do I have to give copies of my statements even though I am not filing since it's HIS money?

I guess the reason I am asking all this before I go to an attorney is b/c I am afraid they are going to slam the door in our face, laugh at us, and tell us to figure it out on our own.

Some of the things we pay for each month that I don't know whether will be "not okay" are registration fees for marathons and half marathons. Those are really charitable contributions.. but not sure how that works. We probably spend an average of $70/month for those.

GAHHH!! Thank you all for your patience and for all your advice!

[StartingOver08]

You have a red flag with the $700 cash advance and the charging on a cc last month when you were 'aware' you were insolvent (this is how the trustee will probably view it). Make sure you wait at least 90 days with NO CHARGES or CASH ADVANCES or BALANCE TRANSFERS. Search on the forum for cash advances, and balance transfers to get an idea of what Trustees will do. Remember YMMV.

Also, the $100/mth payment to your MIL is considered an insider payment. The Trustee could go to your MIL and collect all the payments you have made for at least the past yr and have her turn the funds over to the BK estate. It does not matter to the Trustee that she did not declare the income on her IRS forms, it is considered an insider payment. Now, this is a question to clarify with your attorney too as the Trustees in your district may decide that $100/mth is not worth going after. How many months have you been making this payment to her?

As to the donations to marathons and 1/2 marathons, you may have to justify that to the Trustee and I think it might be difficult to justify, even with a receipt, if you are filing BK and have not cut this out of your budget yet. Charitable donations are allowed, but limited to a dollar amount. You can find out from your attorney what the allowance is in your specific district and keep within that range.

I am not trying to be mean here. Just give you some notice so you can make the changes in your payments and budget before you file so you will not have any issues in your filing.

[coolmom04]

Oh I don't think you're being mean at all! Thank you for your honesty. So, when you say wait 90 days.. do you mean wait 90 days before I even go to an attorney?

We've been paying my MIL $100/month for the past two years. Before that, we were paying her $500/month (for probably 2 yrs). We owe her $5,000.

[coolmom04]

Is it okay to stop paying credit cards now? I mean... if we are struggling month to month and are paying the CC's over paying for things we actually need... like groceries, clothing, things to maintain our home, is it okay to stop paying the cc's when we know we will file in a year?

[StartingOver08]

You can go to an attorney, but you do not want to file within that 90 day period if it is possible for you to wait (actually for cash advances and balance transfers it is within 70 days).

If you read a lot on this forum you will see a common theme: Don't rush to file. Make sure you have all of your ducks in a row (documentation ready). And, time is your friend. The reason you see that a lot is because sometimes by simply waiting until the deadline has passed, you have reduced your chances for problems. BK has a lot of deadlines or guidelines! LOL

Definatly discuss the insider payment to your MIL (as well as the other things) with your attorney. The lookback period on insider payments is 1 yr. Look at this link http://www./2007/08/13/can-i-pay-bac...le-bankruptcy/ The link won't post correctly so look at post #11 below to read the article by Bankruptcy Law Network

[StartingOver08]

Yes, you can stop paying. The only thing I would be careful of is making sure the payment to the cc where you took the recent cash advance last month, make sure it has at least one or two months paid before you stop.

[ForumReader]

"Search on the forum for cash advances, and balance transfers to get an idea of what Trustees will do. Remember YMMV."


Sorry, I did not mean to hijack this thread, but what does YMMV stand for?
I guess I am still learning any new leftover abbreviations on this forum Thanks!

By the way, to the OP, like some other have stated, there are lots of stickies to read from this site, but we are happy to help you understand the BK process if you have any questions regarding BK. Any important legal questions, best to go see an attorney. Good luck!

[StartingOver08]

Opps! YMMV = Your Milage May Vary
which means different results for different people.

[JEM]

Is it okay to stop paying credit cards now? I mean... if we are struggling month to month and are paying the CC's over paying for things we actually need... like groceries, clothing, things to maintain our home, is it okay to stop paying the cc's when we know we will file in a year?

We had to stop paying our CC's this month. In order to be able to pay for the essentials--house payment, groceries, utilities...we had to stop. We were in a never ending cycle of using all of our pay to pay the house and CC's and nothing was left for utilities, gas, groceries and all of the other incidentals...so we'd end up using the CC's for those, thus making our balances go even HIGHER.

The cycle had to stop.

So we chose to stop paying this month. We won't be filing till March--at least that is the current plan.

[coolmom04]

Definatly discuss the insider payment to your MIL (as well as the other things) with your attorney. The lookback period on insider payments is 1 yr. Look at this link http://www./2007/08/13/can-i-pay-bac...le-bankruptcy/

I couldn't get the link to work

Thank you all so much! I've called two attorneys. Hopefully I'll get to speak with at least one of them this evening.

[StartingOver08]

I reposted the link in my post above just in case it was a posting error.
But here is the short article below:

Can I Pay Back My Parents Before I File Bankruptcy?


You shouldn’t try to repay insiders like your parents, siblings, close friends or others before you file for bankruptcy because the bankruptcy court has the power to “avoid” or reverse the payment. In other words, if you repay your friends or relatives, they may have to give back the money you paid them. This is called a preference, because the payments were made to creditors you may have preferred over another. In this context, the bankruptcy code calls your parents, siblings, other relatives and close friends “insiders”.

Payments made to any creditors within ninety days of filing bankruptcy may be preferences, and if so, will be subject to being avoided by the bankruptcy trustee. Not all pre-petition payments are preferences. House and car payments, ongoing rent or utility payments, and regular payments on some types of loans in the ordinary course of business are normally outside of preference laws.

While there is a ninety day look-back for payments made to non-insiders, there is a one year look-back period for payments made to “insiders”. This means that payments made to “insiders” within one year prior to filing can be avoided by the bankruptcy trustee. One rationale for the extended look-back period for insider payments is that people who are close to you have an inside edge to being paid ahead of other creditors.

Make sure your attorney is aware of all payments made prior to filing to discuss how best to protect you or your family/friend. If you haven’t made them yet, don’t do it. Discuss any action you want to take with your attorney. After your bankruptcy case is filed, you will be able to pay back any creditors you want and are able to pay, including your friends or family, although if you file Chapter 13 you will probably have to wait until your case is over. One thing worse than not paying your family member back is having that person sued for the return of the money, and then repaying the same debt again later.

By Susanne Robicsek, North Carolina Bankruptcy Attorney on Aug 13, 2007 in Bankruptcy Practice and Procedure, Benefits of Bankruptcy, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, General Bankruptcy Information

http://www./2007/08/13/can-i-pay-bac...le-bankruptcy/

This link does not seem to be posting correctly, but the article is copied and sourced for your reference.

[dub]

Yes, you can stop paying. The only thing I would be careful of is making sure the payment to the cc where you took the recent cash advance last month, make sure it has at least one or two months paid before you stop.

Would it be a red flag to pay this cc and not the others?

[StartingOver08]

Depending upon when you file, it might be considered a preferential payment to pay only the one creditor. HOWEVER, the OP is not considering filing until March 2010 and if she made a couple of payments on the card with the cash advance the cc can't come after her for abuse for using the card when she knew she was insolvent.

If in fact the Trustee determines that they want to go after the creditor for the 2 or 3 payments made then that is between the Trustee and the credit card issuer and not the debtor. It would be unlikely that the Trustee would go after those payments depending upon the size of the payment made to the creditor. There is spot in the petition for the debtor to list all payments made within the previous 90 days prior to filing. They are looking for cumulative payments over $600 to a single creditor (unsecured). Naturally you can pay your secured creditors, especially if you are looking to keep your home, car and any other secured asset.

[dub]

I understand....... thanks!

[coolmom04]

Depending upon when you file, it might be considered a preferential payment to pay only the one creditor. HOWEVER, the OP is not considering filing until March 2010 and if she made a couple of payments on the card with the cash advance the cc can't come after her for abuse for using the card when she knew she was insolvent.

If in fact the Trustee determines that they want to go after the creditor for the 2 or 3 payments made then that is between the Trustee and the credit card issuer and not the debtor. It would be unlikely that the Trustee would go after those payments depending upon the size of the payment made to the creditor. There is spot in the petition for the debtor to list all payments made within the previous 90 days prior to filing. They are looking for cumulative payments over $600 to a single creditor (unsecured). Naturally you can pay your secured creditors, especially if you are looking to keep your home, car and any other secured asset.

I'm sorry to ask yet ANOTHER question, but does this mean that I shouldn't pay more than $600 total to any one unsecured creditor in the 90 days prior to filing? Because I make my monthly payments and for three months, on at least three of them, that would be greater than $600 each in a 90 day period. It's because I continue to make these payments that we suffer in other areas...

I did get an appointment with an attorney for 01/12/2010! I can't WAIT!! I know she can answer these questions at that time, but I am curious