Filing CH7, still using credit cards

[ccsjoe]

I know the rule of thumb is not to use cc's 90 days to 6 months prior to filing. My wife and I have been floating our household expenses with cc's every month, so that every time we paid some amount down, we would charge up again with items such as public transit weekly passes, gas, groceries and your token once in a while fast food trip or chili's. We are trying to stop using them as of now, however, because of the means test we need to file by August 29th. Since none of our spending has been excessive (no individual item over $500) or luxurious, do we stand a chance at not being accused of presumption of abuse?

On one card we charged (and paid) 2K in last 6 months
On two others, we charged and paid 1.1K in last 6 months
Other 3 cards less than 500 in last 6 months

But all used in last month. Problem was we'd pay the minimum or slightly more, but later we'd need the money since not enough cashflow and would have to use the cards (vicious cycle). Every single one of them is fully maxed out.

Thank you

[eventsdj]

All I can add is what my lawyer told me. No purchases or payments above $600 prior to filing.
Incidentals didn't concern her at all. Everything went fine for us.

[ccsjoe]

Thanks events. I was hoping to hear that.

[KevFinnerty]

All I can add is what my lawyer told me. No purchases or payments above $600 prior to filing.
Incidentals didn't concern her at all. Everything went fine for us.

When you say "prior" to filing - what timeframe are you taking about? A month? Six months? A year? What?

I ask because I used a card for big car repairs in February/March, and took a big cash advance on it on March 31st.

[helpmeout]

When you say "prior" to filing - what timeframe are you taking about? A month? Six months? A year? What?

I ask because I used a card for big car repairs in February/March, and took a big cash advance on it on March 31st.

The car repairs are probably okay. The cash advance may be a problem. I would make a few payments on that card and wait to file until it is at least 9 months old.

[DebtHater]

To the OP, what do you intend to accomplish by filing BK? In you post it appears that you have a bigger problem than debt. It seems that a combination of your income and expenses are the bigger issue.

If you could be discharged of all of your debt tomorrow, would you be able to make ends meet? Would you be able to take care of all of your expenses with out using credit cards? There's a very good chance that one you file those credit card will be closed whether you owe a balance or not.

If you created a budget work sheet listing your expenses (not counting credit cards) vs your income, would you income be equal or greater than your expenses?

[backtoschool]

90 days prior to filing is the legal definition of insolvency for bankruptcy purposes. If you use your cards 90 days before filing, the creditor can file an AP against discharging that debt without having to prove fraud because it is assumed legally that you knew you were insolvent when using the cards.

If you are just charging small amounts (under $500) for necessities they probably will not come after you, but if you take cash advances or charge anything big, expect an AP.

[ccsjoe]

Debthater,

The short answer is yes, if I stopped having cc payments tomorrow, I would be able to meet living expenses. Yes, we have run through budgeting multiple times, always with same result.

Backtoschool,

Thank you. Amounts are small, gas money, etc. No cash advances or luxury purchases.

[backtoschool]

Debthater,

The short answer is yes, if I stopped having cc payments tomorrow, I would be able to meet living expenses. Yes, we have run through budgeting multiple times, always with same result.

Backtoschool,

Thank you. Amounts are small, gas money, etc. No cash advances or luxury purchases.

I think you are fine. I would stop paying on the cards immediately and also stop using them. The money that went to paying the minimums should now be used for the expenses you were charging on them.

[frogger]

Stop using and paying the cards.

[ccsjoe]

And that's what I've done, stopped paying the cc's so I don't need to use the cc's to cover cash flow. Unfortunately I inly stopped paying/using as of end of July. Fortunately, all charges were small and living expense related.

[KevFinnerty]

The car repairs are probably okay. The cash advance may be a problem. I would make a few payments on that card and wait to file until it is at least 9 months old.

Thanks. Guess I may get screwed on that, but nothing I can do. I intended to continue making payments but couldn't since my $$ coming in completely stopped shortly afterwards and only made one payment afterwards (perhaps two, but I forget). I am delinquent on that card and have no hope whatsoever at this point of making any payments. And I cannot wait to file much longer, let alone 9 months - I need to file soon to stop foreclosure on my house. Hopefully the lawyer (free legal aid) will have more advice.