total newbie with two questions, hope you can help!

[zingabot]

Hello everyone,

I'm new here And have been reading everything I can find online about filing Chapter 7 in Illinois. Our situation is my husband (primary wage earner) has been unemployed for 8 months. I just began a part-time job, but all together, with that and unemployment, we have just enough to cover rent & utilities & food and our car payment. The credit card debt has a chokehold on us (most of it due to a 22-month period of unemployment a few years ago) and we just can't pay it anymore - the money isn't there. We've just begun going into default on it and I plan to file Chapter 7 as soon as I can. Oh, and we also have a van we make payments on that we can't anymore, so it will probably be repossessed or we will sell it to pay off the loan (is one of those options better than another?).

I have three questions I though some of you might be able to help me with:

- one of the credit cards is with the bank that has our checking account too, and I'm a little nervous about them just hitting our bank account for the amount overdue (thereby cutting into the money we need for rent). Can they tap into your checking account like that legally? Just to be safe I'm trying to get us set up with another bank, but it will take a little bit of time.

- I read that cash advances taken within 70 days of filing are *not* able to be discharged. I took a cash advance around 11/1 to pay our rent, but I have no proof that it was used to pay the rent. Any thoughts on that? Am I understanding correctly about the 70-day wait? I would *really* like the cash advance portion discharged since it's at an outrageous 25% rate.

- Ironically, now that I've finally come to terms with filing for bankruptcy, which was a huge thing for me, my husband has been contacted about two possible job opportunities. If he gets either of them we will fail a means test. And while I strongly believe that we should pay our debt, we just can't get ahead financially while we're paying $1500 a month toward it. My question is, what happens if we file for Chapter 7 and during the two months we're waiting for discharge, he gets hired? Will our case be dismissed? And then what if I have to wait that 70 days because of the cash advance and he's hired before that date? Will we eligible to file?

Thank you so much for any input you can give!

[justbroke]

- one of the credit cards is with the bank that has our checking account too, and I'm a little nervous about them just hitting our bank account for the amount overdue (thereby cutting into the money we need for rent). Can they tap into your checking account like that legally? Just to be safe I'm trying to get us set up with another bank, but it will take a little bit of time.

Yes, they can and this is called a "right of setoff". You should "quietly" move your checking and other demand deposit accounts to a new "neutral" bank where you don't utilize their credit products! Do this well before filing.

- I read that cash advances taken within 70 days of filing are *not* able to be discharged. I took a cash advance around 11/1 to pay our rent, but I have no proof that it was used to pay the rent. Any thoughts on that? Am I understanding correctly about the 70-day wait? I would *really* like the cash advance portion discharged since it's at an outrageous 25% rate.

It's technically 70 days if it's over $750. Time heals all wounds. Now that I said that, the more distance and time you place between those cash advances and filing, the better. At least 90 days should be sufficient. Also, you may want to make at least one payment on the card. You don't want to show that you never intended to pay.

And to be clear, that's just a "presumption" of non-dischargeability. The creditor would need to file a complaint (Adversary Proceeding) to actually make it non-dischargeable. Generally speaking, no creditor would pursue any amount under $4K because it can easily cost that much to prosecute the complaint. How much are we talking?

- My question is, what happens if we file for Chapter 7 and during the two months we're waiting for discharge, he gets hired? Will our case be dismissed? And then what if I have to wait that 70 days because of the cash advance and he's hired before that date? Will we eligible to file?

Nothing happens. The Chapter 7 Bankruptcy is really a snapshot of your financial status at the time you filed. At the 341 Meeting, you may (or may not) be asked if anything changed as to employment or financially. If your spouse doesn't have the job yet (hasn't actually started working), then the answer is no! (The promise or expectation of a job, is not a job!) You are still eligible to file, again, because it's what your picture looked like the day you filed (including income from the prior 6 month period). That's it!

By the way, that was 3 questions!

[AngelinaCatHub]

JB, LOL. Yes what can I say? Everything he said is correct. Stall as long as possible, but be prepared with you lawyer, forms and all things in a row. If Hubby looks like he will become employed, by all means, do not give up a job. Not many out there. But, file before the hire. Only my two cents. 'hub

[mtbc]

Is it important that even a job offer hasn't been accepted before the 341? Or is just not actually having started work yet sufficient? (And then if circumstances change after the 341 but while the case is open, that's okay, or must the trustee be notified?)

[zingabot]

You guys rock. That was so helpful. The cash advance was $2100 - more than our rent, but it was some funky thing the Bank of America employee did to try to get me to open a checking account and we had zero cash at the time, so with that amount I paid the rent and bought groceries and other such things. And I *have* made the minimum monthly payment since then. That's good news about them actually having to file about the cash advance - so basically *they* would have to bring it up - I thought the trustee might ask me if we took any cash advances and then I'd have to say yes. Actually, I suppose he could still do that, but it's not up to him to dispute the 70-day requirement, it's up to the cc company to do so - that's what you're saying, right?

So basically it seems best for me to file as soon as I can and if dh is offered a job, attempt to push off the start date.

Meanwhile I'll move what little cash we do have over to the account with the bank to whom we owe no money.

Let me know if I missed something here - thank you so much.

[justbroke]

Is it important that even a job offer hasn't been accepted before the 341?

A job offer is not a job. If you have a job offer and even a start date... it's not a change in job, unless and until you actually start working at that new employer. It's as simple as that

Or is just not actually having started work yet sufficient? (And then if circumstances change after the 341 but while the case is open, that's okay, or must the trustee be notified?)

Remember, your entire Chapter 7 bankruptcy is based on what your status was the day you filed. The only reason the Trustee asks if your employment of finances changed since filing, is to see if there are "special circumstances" which would warrant dismissal.

For example, winning the lottery right after filing. While the bankruptcy estate doesn't include the lottery proceeds, the Trustee could ask the court to move for dismissal due to the "totality of circumstances" because your circumstances changed significantly.