Need advice

[BrokeinMD]

Glad your protection plan worked out for you, Babybear, my experience was not the same, and many have had similar situations as mine, but again, that's another story.

Best of luck to you in your endeavours.

[tcreegan]

Hi BabyBear,

....wow....your situation has so many issues it will need a good therapist! Oops, meant good BK attorney..

WF may object to discharge of their debt. (It will only be their debt, not others) Paying on it for awhile shows a "good faith" effort to repay. "Awhile" varies but the longer the time between charge and BK the less likely it gets challenged. What got charged is important; if there is a range from luxury to basic necessity, the closer to basic necessity the less likely the charge gets challenged. Amount matters, it cost $$ to object to a debt in a BK, the smaller the charge, the less likely the objection. Ask a local BK attorney if a $3200 charge for furniture [x] months before a BK will draw an objection from WF.

The bit about a 'security interest' on a store credit card means technically they can repossess the item(s) purchased. In practice they make noise about repossessing to get you to cough up some cash, but the never repossess b/c now it is used goods, worth a fraction of new.

Not paying on credit cards before a BK is normal, but at some point they will sue for a judgement. The earliest to expect this is ~3 months, but usually longer. And these suits are easily stalled, your attorney can drag it out for months and months. I would stop paying on all credit card debt except the WF large charge.

Paying one creditor over others is "preferential payment" but it is something the BK trustee deals with, not you. Your Macy's and Amex won't object if your charges are more than 90 days from filing, not extravagant, and especially not if you have been making payments until recently.

You can help your mother, you can accompany her, but you cannot represent her. She will have to appear at the 341 meeting and answer questions under oath to the BK trustee. If WF does object, she and/or her attorney appear before the court, state why they think the debt is legit/not fraudulent, you can appear as a witness. If WF wins, they collect according to the state laws that govern collections of money judgements. (garnish income, levy bank accts, seize property, lein on property, etc) Given your mother's age and the complicated nature of the case, a BK attorney is going to be a necessity not an option.

Being able to sign on your mothers accounts might leave you open to liability, might not. Something to check w/ a local BK attorney.

Moving the account to a new bank is not deceptive. You will list the new bank on your BK schedules. Getting accts out of banks where you are going to discharge a cc just makes sense. ...don't defecate where you eat...

Taking large sums of $$ out of accounts draws a red flag, document where the money went...legit expenses like medical, legal, food, utilities, taxes won't be a problem. Have receipts. How far back gets examined depends on the BK trustee, it ranges from a month to 2 yrs. A local BK attorney should know what trustees typically do in your area.

That said, getting the cash out of accounts is good BK sense. Only leave behind what can be exempted. That said, document where the $$ goes to legit expenses. How much you can have in the bank depends on your state/federal exemptions.

BK attorneys should have a free/low cost consultation. Have a list of questions, don't pay a retainer unless you are comfortable and confident in them. Ask what exactly is covered by the fee and what would be extra.

Hiring a BK attorney doesn't reveal the BK to the creditors, but if they are willing you can refer all creditors to them and they might be able to stall creditors from filing suits. Once you hire a BK attorney, do not use any credit no matter what.

The BK attorney might assume you are a long time CA resident, but less than 2 yrs = you are going to have to use the BK exemptions from your previous state or federal exemptions if the previous state homestead exemption can't transfer to CA or the previous state allowed federal exemptions. You have been in CA long enough to file at the local courthouse but not long enough to use their exemptions.
What is your previous state? This will determine how to protect the house and how much soc.sec. can be in the bank on filing day.

Whew!! Did I get everything? Well keep posting questions, we'll keep trying to trot out some experience to share!

Tom in Colo

ps: don't fault the folks for thinking credit card payment protection is a scam. The attorney generals in several states have issued warnings about scam artists preying on people behind on cc debt. You might have lucked out and got some legit folks who helped you out of some debt instead scam artists helping you out of all your cash on hand.

[Babybear]

Thanks Tom. I loved the part about not taking a sh--t where you eat. It reminded me of my dog ...lol. I wouldnt mind a good therapist too if you know one. Anyway my mother lived in New York prior to moving to Ca. and I looked up the exemptions. thank god they was just changed to allow 150k for homestead so that would mean our house is exempt since it has 80k equity. Correct? its amazing how most attorneys didnt even ask this and when wanted 300 an hour to research the exemptions there. I found one attorney who said he will charge me $1000 but than he wants an hourly rate to do any litigation other than a simple bk filing. It seems they all want to add on more money for the unknown objection which concerns me in that we are now so low on cash. Even now its frustrating trying to get answers. They spend some time helping but than expect to get paid by the hour to go into more detail. I know thats their job but most of the info is online or here in this forum. How do you get an overall price? Is it possible? what if their are objections? What scared me in reading some of the issues on here that people have is when these trustees want to take something or when the lawyers give bad advice and the person filing finds out last minute that they really arent going to get to keep the house or car or be able to get the discharge. I guess I live garenttees and feel a bit scared of the outcome. If I can distance myself like you said in terms of time from the charges and continue to show good faith I do think it will help. What is a legit expense? I mean I took out the carpet and counter and have cement on the floor and a piece of plywood on the counter because I planned to do more home remodeling but than home depot decrease our credit form 11k to 4k overnight and now we cant get what we need. So if we spend cash on this is it legit or are me expected to live with no floor? The one attorney who I did speak to said you can turn almost anything except maybe a luxury vacation into a necessity. For example buying a couch so you dont have to sit on the floor or a temperpedic bed if you have a bad back or lamps if you have no light in the house. I mean almost anything can be argued as a necessity when you buy a house and move cross country and are 81 with tons of medical needs. Can she also claim that I needed money for some unpaid taxes as a necessity? I dont know. But to me it is a necessity because if we dont pay it they will take and sell my car which is needed to drive her to the doctor. So a good arguement can be made for that 10k. I am not worried. Why do they ask if you sent over $600 to one creditor? If I do send more to one and less to others what happens to the one who got over $600? I have sure learned alot in the past few weeks researching this. I guess I am still just in conflict over continuing to pay 100s per month now or stopping soon and maybe getting sued or fighting a discharge and settling and than paying. I guess the numbers work out better with the second option but I am not sure. Can you tell me which way is better from peoples experience. The lawyers seem to say to just stop paying if you plan to file, some say make small payments. There just is no real conclusive answer to this as I see in all the threads. So we all just have to guess as to which way to do this. what was your situation? Did you wait a long time after your last charge on a card? When did you stop paying anything? How long did you wait til you filled? what are points and levels next to your name on here? what does that mean?


Thanks again

[tcreegan]

It reminded me of my dog ...lol. ...keep telling my wife this is a workable solution, but she insists on the pooper-scooper method

Watch out on the NY homestead exemption, it is different for different counties.
Increases the homestead exemption under Section 5206 of the CPLR from $50,000 to: $150,000 for the counties of Kings, New York, Queens, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester, and Putnam; $125,000 for the counties of Dutchess, Albany, Columbia, Orange, Saratoga, and Ulster; $75,000 for the remaining counties in the state;

The other factor that needs an expert legal opinion is using the NY homestead exemption when you are not in NY. Some states don't allow you to use their homestead exemption if you aren't actually in the state. I looked at the NY law (CVP article 52 section 5206) and didn't see anything specifically stating you had to be in-state, but I am NOT a lawyer. And this is important, if the NY homestead exemption is not portable, you are stuck w/ the federal exemptions....~21K Email a couple NY lawyers (not CA)

Keep working on getting a good attorney, they should have a set fee for a BK and can tell you what is covered and what is not covered and how likely the not-covered will happen and what it will cost. Keep shopping, you may have to kiss a few frogs.....

House basics like replacing old carpet, countertops, etc is non-luxury if you didn't put in luxury replacements. Formica, tile countertops = not luxury Fancy cut & polished granite = now we are out of the legit need category. Anything medically helpful to an 81 yr old lady is exempt.

The more than $600 bit is a "preferential payment" issue, paying one creditor over another. But this is not something you have to deal with. The BK trustee can go to the creditor who got more than their share, take the money back, and redistribute it equally to all creditors. Again, does not effect you.

We quit paying credit cards for about a year and a half b4 the BK. I stalled them for months but 3 got judgements when I was hospitalized but none tried to collect, nothing to collect aside, they didn't even try. After our meeting w/ consumer credit counseling (the HUD non-profit) and they told us it was hopeless, we quit paying on everything except basic utilities and car insurance. Filed 2 months later (still holding out hope we could get a mortgage mod HA!) The best take on credit cards is that you are going to have to live w/o them at some point anyhow, no time like the present.

I think the best approach would be stop paying on anything going into the BK; stop using any credit; keep looking for a good attorney, and check w/ a NY lawyer about the homestead exemption being portable.

Hang in there,

Tom in Colo