How large is a "large amount" to charge on CC's before filing?

[sillywalks]

In my research about bankruptcy, one of the snippets I saved says that you should wait to file at least 90 after any 'large' charges on CC's -- any one have an idea of what 'large' is in terms of bankruptcy?

It also says if any 'very large' charges (what is 'very large'?) were made in the 365 days prior to filing, at least 3 payments should be made to those accounts (possibly more). Does this mean 3 payments in 3 months? Could it be 3 payments over 1 month? Wouldn't anything over $600 be considered preferential? Any ideas as to how much these payments can/should be in proportion to the charge? For instance, one charge was $400 -- should I work to pay this off in 3 months? Pay just the minimum? Somewhere inbetween? Another charge is $1500 (CARE credit for emergency medical care for my cat) -- should I look to pay up to $600 in the next three months (assuming I can)?

Any opinions or advice based on what you have experienced or learned about from others would be appreciated.

I know it is a bad idea to charge anything to cards when I am considering the possibility of filing -- I just did not see any other options for the emergency.

Thanks.

[scorpion35]

i would pay more than the minimum for at least 4 to 6 months just to be safe
u can't just make 3 payments in one month
and yes its fraud to charge up your credit cards if u know u're not going to pay it back

[sillywalks]

I don't know anything for sure, yet, but I would not have charged if there was not a life at stake (literally). Assuming I have the money, I have no problem with paying more than the minimum for these charges -- even trying to pay them off. But, if I do that, and then file, won't the court just take the money back from them?

Can I stop paying on the other cards, do you think? And just pay on the ones I put the emergency medical bills on? Or would that create more issues?

[ccsjoe]

Whether or not the trustee deems the payments preferential is not your problem. Your problem, regardless of your payment to them, is that you charged up prior to filing knowing that you were going to file. Yes, it was an emergency. But also look at it from a trustee standpoint. Assuming you pay back the $1500 plus $400 in 3 months and then file, that was money that 1. could have been spread around to all creditors, so it is possibly preferential, and if so, you did not really pay back your debt as the trustee will seize and redistribute; and 2. you still incurred the charge knowing you were going to file, hence potential fraud.

I am not accusing you of anything at all, I understand emergencies, but this is how you need to look at it. You charged knowing you would file. That's the bottom line.

Quite honestly I think you need to put 6 months plus a couple weeks from the date of the charge and your filing date. You should make the minimum payments until then, no extra.

Just my 1.5 cents on the matter.

[Flamingo]

Well, I'll tell you we had to provide to our attorney for the Trustee a listing of all charges, deposts, withdrawals or checks written over $500 for a period of one year. That will give you some idea...

[AngelinaCatHub]

I agree strongly with 'ccsjoe':. I believe we talked before when your cat became ill. It would behoove you to pay equally all cards, give bk a bit more time. If you stop paying anyone, ALL the others will become preferential and confiscated. You really don't want that. As others said, you had intent to file bk, but the emergency came up and "what could you do"? as we talked about before. Same situation as we talked about, let it roll on in time for at least six months like from NOW. You are less likely to be questioned about such things then. Really, though, pay the cards, but stop using them now. 'Hub

[backtoschool]

Well, I'll tell you we had to provide to our attorney for the Trustee a listing of all charges, deposts, withdrawals or checks written over $500 for a period of one year. That will give you some idea...

+1. I had to do this too. The trustee looked at all my charges and all my bank account deposits and withdrawals for a year before filing.

As to the charges, you should wait several more months to file (at least 3) to avoid AP's which are quite costly and are a separate trial from bankruptcy.

[sillywalks]

I understand what you are saying...

I have read in other posts where people have had to charge for an emergency situation, and the general responses were that the trustee will usually understand special circumstances. Would that not be the case here? I did pay for about $800-900 out of my checking account (all that I had) as well.

I know it may ring hollow, but although I am trying to research and prepare myself mentally for filing, I have not decided to file, nor have I consulted an attorney about filing at this point. Ultimately, I have thought I would wait to find out what the bank that foreclosed on my house decides to do about the discrepancy before I decided whether or not to commit to filing.

Understand, I am not comfortable with the charges I felt compelled to put on credit. I have not been spending on my cc's for the past month or more, trying to live only on what I make -- until my cat nearly died. If he had not gotten sick, I would not have charged on my cards at all (other than the accidental charges from things like World Vision, which was charged to my AmEx because I forgot to change it over!).

I think I can possibly wait 6 months to file, assuming I do not run into any big financial disasters anytime soon! I have had to spend several thousand on my cars (mine and my son's), about $4000 on my knee surgery, plus my sick cat (and another $1000 for shots/tooth extraction for another cat before Kodi got sick). It's been a tough summer.

Truthfully, if I can manage it financially, I would prefer to wait until I know what is going to happen (or not) with my foreclosure. I guess I was just wondering if I end up not being able to wait, what would be the shortest amount of time I could squeak by in.

When you mention 6 months, do you mean 3 months of payments, then 3 months of not paying on the cards, or 6 months of payments, plus 3 months of no payments, then file?

Thanks for your input!

Whether or not the trustee deems the payments preferential is not your problem. Your problem, regardless of your payment to them, is that you charged up prior to filing knowing that you were going to file. Yes, it was an emergency. But also look at it from a trustee standpoint. Assuming you pay back the $1500 plus $400 in 3 months and then file, that was money that 1. could have been spread around to all creditors, so it is possibly preferential, and if so, you did not really pay back your debt as the trustee will seize and redistribute; and 2. you still incurred the charge knowing you were going to file, hence potential fraud.

I am not accusing you of anything at all, I understand emergencies, but this is how you need to look at it. You charged knowing you would file. That's the bottom line.

Quite honestly I think you need to put 6 months plus a couple weeks from the date of the charge and your filing date. You should make the minimum payments until then, no extra.

Just my 1.5 cents on the matter.

[sillywalks]

Angelina --

I have stopped using the cards (with the noted exceptions). It's tough! I did not realize how much I depended on just knowing I COULD fall back on my cards (even if I didn't). No safety net anymore, and it is uncomfortable!

On the plus side, my Kodi is back to his old playful, loving self. No more cone head! He's still trying to learn how to pee from what is basically his belly-button (imagine a girl dog peeing) without getting his legs wet -- but so far, so good. The next fear is incontinence, but I think that will be okay. He dribbles a little, but I think it's just part of the healing process. He's only just over a year old...lots of life left to live!

I am going to try to wait as long as I can to file, for sure. I flip flop -- part of me hopes the bank does not pursue me and I don't have to file -- part of me thinks file now just to get it over with and behind me (at least, that was sort of my thought before the emergency).

Thanks!

I agree strongly with 'ccsjoe':. I believe we talked before when your cat became ill. It would behoove you to pay equally all cards, give bk a bit more time. If you stop paying anyone, ALL the others will become preferential and confiscated. You really don't want that. As others said, you had intent to file bk, but the emergency came up and "what could you do"? as we talked about before. Same situation as we talked about, let it roll on in time for at least six months like from NOW. You are less likely to be questioned about such things then. Really, though, pay the cards, but stop using them now. 'Hub

[sillywalks]

+1. I had to do this too. The trustee looked at all my charges and all my bank account deposits and withdrawals for a year before filing.

As to the charges, you should wait several more months to file (at least 3) to avoid AP's which are quite costly and are a separate trial from bankruptcy.

I wonder if this varies by state/trustee? It seems the NoLo book says they look back 3 months and 6 months (plus 2 years for tax returns)? I could be remembering that wrong...

[catleg]

The worst that can happen is that the amounts involved are declared non-dischargeable, meaning you have to pay them back anyway. So assuming you don't blow it on a cruise vacation or spa treatments, but on the necessities of life, you're really no worse off. Most of the horror stories involve egregious behavior, like that woman on real NJ housewives.

[sillywalks]

The worst that can happen is that the amounts involved are declared non-dischargeable, meaning you have to pay them back anyway. So assuming you don't blow it on a cruise vacation or spa treatments, but on the necessities of life, you're really no worse off. Most of the horror stories involve egregious behavior, like that woman on real NJ housewives.

She is a little nuts, hmm? Yeah, no luxuries around here lately. My mom (who is a widow now) did take me on vacation with her, which was great! I certainly don't mind paying for the care my cat received! It's a bit of a catch 22 that if I paid the whole bill, the trustee would probably take that money back. But, maybe I can wait long enough to file (assuming I end up having to file) that it won't make any difference!

Thanks!

[ccsjoe]

When you mention 6 months, do you mean 3 months of payments, then 3 months of not paying on the cards, or 6 months of payments, plus 3 months of no payments, then file?

Thanks for your input!

You can do 3 and 3 if you want. What I am most concerned with is putting some distance between your charge and the filing date. Yes, as catleg pointed out, the amounts can be deemed non-dischargeable and you have to pay them, however if you can avoid complications and hiccups during your process all the better.

[keptdigging]

You really need to decide if you're on a track towards a filing. Because if so you enter a different world where what you want to do completely changes.

In general, if you're headed towards filing..

1. You MUST stop using credit.

but
2. There's no point in paying on your cards. Save the cash to aid your effort on #1. The only exception is if you've made recent charges that are "large", in which case make some MINIMUM payments. But mostly, conserve your cash.

Other comments:
- $1,500 might qualify as a "large" charge but certainly not as "very large." There are people who have made balance transfers of $10 K or more.

- When to file generally becomes a series of trade offs: risk of a debt being non-dischargeable vs. risk of failing the means test. If you're thinking of filing a 7, the means test and your forward looking disposal income will absolutely be checked and scrutinized. But non-dischargeability requires a creditor to take legal action (and incur legal costs.) A 6 month old charge of $1,500 is probably not worth it too them. And worse case the non-dischargeability only affects that amount. So it's a secondary consideration compared to the the means/disposable income tests.

- Most Adversary Proceedings here seem to come either from either non-bank creditors or against debtors who aren't represented by decent attorneys.

And finally:

Your biggest issue isn't the charges you've made. It's preparing for the next $1,500 expense and not charging that as well.

[sillywalks]

<<In general, if you're headed towards filing..

1. You MUST stop using credit.>>

I agree -- except I think this is true no matter what I do. Apparently I have lost control of my use of CC's, so I need to stop using them!


<<- $1,500 might qualify as a "large" charge but certainly not as "very large." There are people who have made balance transfers of $10 K or more.>> That helps, thanks!

<<- When to file generally becomes a series of trade offs: risk of a debt being non-dischargeable vs. risk of failing the means test. So it's a secondary consideration compared to the the means/disposable income tests.>>

That's a great point!

<<Your biggest issue isn't the charges you've made. It's preparing for the next $1,500 expense and not charging that as well.[/QUOTE]>>

This is my biggest immediate worry -- without cards, I don't have a safety net, and if I'm paying the minimum payments, there is not much chance of building a cash safety net. If something happens to my car (185K miles), I cannot afford to miss work -- but how would I fix it?

Ick. I hate being in this place -- I have a good job and I'm not 20 -- it just feels wrong. <sigh> Ce la vie!