line of credit

[jelo6875]

I received a check today from a company we have a line of credit for in the amount of $1000.00.....I have only met with a lawyer one time to go over what it takes to file chapter 7...he knows nothing about our debt. What will happen if I cash this check and use it to pay him? We need to file ASAP which he states will be August 1st because of judgements agains myself and my husband. We just don't want to do anything to mess this up but am having a really rough time financially without having to come up with the $1300 to pay him.

[newbie2]

I received a check today from a company we have a line of credit for in the amount of $1000.00.....I have only met with a lawyer one time to go over what it takes to file chapter 7...he knows nothing about our debt. What will happen if I cash this check and use it to pay him? We need to file ASAP which he states will be August 1st because of judgements agains myself and my husband. We just don't want to do anything to mess this up but am having a really rough time financially without having to come up with the $1300 to pay him.

If you cash it you should be prepared to pay it back once you file. The company who sent it to you would probably file an objection to it being discharged, as it is just days from your filing.

[sunkinsc]

My understanding is you will have to pay it back

I received a check today from a company we have a line of credit for in the amount of $1000.00.....I have only met with a lawyer one time to go over what it takes to file chapter 7...he knows nothing about our debt. What will happen if I cash this check and use it to pay him? We need to file ASAP which he states will be August 1st because of judgements agains myself and my husband. We just don't want to do anything to mess this up but am having a really rough time financially without having to come up with the $1300 to pay him.

Obviously I am not a lawyer but as I recall anything greater than 'x' amount taken within 60 days of filing is not dischargable. Hopefully someone else will confirm this that is a BK attorney. I would check the laws on this or even ask the attorney you are looking to hire and explain why you are taking the loan.

You can also file pro se like we did if you are a simple no asset Chapter 7. It really is not that hard if you pick up the NOLO how to file book. It walks you through it.

[keptdigging]

Borrowing the money to pay your lawyer to file BK is a classic "not dischargeable" case. Forget the 60/90 days (which only affects presumption and burden of proof.) Any money borrowed without intending to pay it back is theoretically non-discharegable. (I say theoretically because (1) creditors have to actually object, and (2) no one can read your mind, so there is a legal process in that determination.) In this case, you're borrowing the money to NOT pay your debts. It's about the clearest evidence of intent possible!

That said, having $1,000 of non-dischargeable debt might, in the totality of your circumstances, be much better than the alternatives.

It is also possible that a creditor might not view $1,000 as enough to challenge (especially if they don't know exactly where the money went.) But I wouldn't count on that.

But I'd make sure I was fully prepared to pay it back under the terms of the credit line.

[jelo6875]

When you guys say pay it back do you mean the whole loan or just the 1000 advancement and would we have to pay it all back at pne time or make payments on it? Also what would happen if we didn't discharge this loan?

[newbie2]

When you guys say pay it back do you mean the whole loan or just the 1000 advancement and would we have to pay it all back at pne time or make payments on it? Also what would happen if we didn't discharge this loan?

You have to include the loan in your bk filing, no way around that. I think though that only the $1000 would not be able to be discharged, if the creditor filed a complaint. It shouldn't affect the whole debt to the creditor, but ask your attorney to be sure.