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    Keeping credit cards

    Ok this is my first post so please forgive me if I am asking stupid questions.

    Also forgive me if this gets to be somewhat of a novel in size. I'll try to be concise.

    I live in snohomish county, of Washington state. And will have to file in the seattle bankruptcy court.


    I won't go into the reasons here, why I got myself upside down in credit. I'll just say that at one time, I had no choice but to get credit cards, just to 'survive'. And I have been paying for it ever since. I would have lost everything, without them, when I needed them. But they have had their pint of blood and a couple gallons more, since.


    I am only going to be filing on about 7 thousand dollars worth of debt. And before anyone gets out their sledgehammers of incredulosity about filing on "such a small amount", It will be clearer later on.

    6 thousand of that, is credit card debt. (Closer to 7500.00 if you include the two cards I want to keep. And 8500.00 overall.)


    I believe that I am legally obligated to include ALL of the credit cards in the bankruptcy.

    How do I go about keeping two of the cards ?

    ~~~~~~~

    Now to explain a bit of my circumstances.

    I am retired. I live on 746.00 a month. I do get the bills paid every month. But because of all the CC payments, I am penniless every month, by the end of the first week. From that point on, I have nothing for groceries or gas.

    This is no way to live, and I have lived this way, for years.

    I am not a stupid man. I do the best I can with what I have. I really don't know anyone else who could have made it as long as I have, on so little. When I did the required credit counselling, by the time I was finished, my "counsellor" was incredulous, and was telling me that I should do exactly as I have, because it was better than anything they could recommend.

    ~~~

    Once I used the credit cards, it became a viscious circle. I had to go on using them, because, as I pointed out above, I was penniless after paying their bills. After a few years it had gotten to the point where I couldn't use them, because they were full up used. But I still had to make the payments every month.

    That's where it has been for a couple years now. It's bad enough on the face of it. But some of the creditors have done things to intentionally cause extra charges. Those come as hammer blows that cause you to lose any progress that you have made so far.

    ~~~

    Here, I'll insert one incident. A horror story about Bank of America.

    I made an online payment. I always save the "confirmation page" to my own computer before leaving their site. Well, I forgot, once. Never again, after that.

    That one time.. I paid. I got the confirmation page. All was well with the world. This payment was made two weeks before it was due. I was feeling good about that.

    That money was immediately taken from my bank account, the instant I hit the "pay" button, and was gone from that point on.

    Four weeks later, I am on their site to make the next payment, and discovered that I owed over 80 dollars in extra charges.

    They had held the payment for over two weeks, and counted it as paid, the day after it was due.

    I was on the phone, immediately, and two times after that, trying to get to talk to someone who either cared, or who had any sort of ability to actually DO something. But the end result was always, "Well, according to our records, you paid a day late. The money doesn't show at any point before that, in our records."

    Well, of course it didn't show in their records. They changed the records, to fit what they had done.

    Ok, so after they held the payment for over two weeks, then they added the late fee. That brought me over balance. They added a fee for that. And I can't remember what else they charged me for. There were at least three charges, and now I owed over 80 dollars in charges, and the regular monthly payment on top of that, by the next due date. Plus, to be smart about it, I would have to add an extra 25 dollars, to bring the 'balance' far enough back from the line that they wouldn't just pull the same sort of thing again.

    They had trumped up so many extra charges in this way, and in other ways, that over the course of about 14 months, on a card that had a limit of 1000.00.... I had paid over 800.00 in EXTRA charges and fees.

    I did close the card after that last incident. And now I call them "Bunko America", because I am absolutely convinced that they are doing just that. Running Bunko on America.

    ~~~

    I closed all the accounts that I want to file on, two months ago. I am still current on all my payments. But I have decided that enough is enough.

    If I file on the debt that I want to file on, I'll regain about 185 dollars a month. I know that that doesn't sound like much to most of you here. Probably just candy bar money, for some. But when you are absolutely penniless for most of the month... Month after month, after month, after month, aft... Well you get the picture.

    After being this way for more than three years, and with no end in sight... Sometimes 20 dollars can get to seeming like it might as well be a thousand.

    With that, I'll have a bit of 'breathing room'. I'll use some of the savings, to pay off the two cards I want to keep, a bit faster. The rest will all go into either my 'tank', (groceries. LOL), or my truck's tank.

    ~~~~~~~

    The reason I want to keep the two cards I want to keep :

    I have told people many times, that being poor is expensive.

    When you are this poor, any little thing going wrong is a catastophe. Plus, you end up paying for things that you wouldn't have had to pay for, if you'd had enough money to do things a bit differently.

    For instance. Very recently, I did not have the money to pay a rather large electric bill. Two bill's worth, so they were going to disconnect me. I was one day from disconnect. If I didn't pay today, it would be disconnected, tomorrow. (I am diabetic, so I need that refridgerator to keep running, to keep my insulin supplys.)

    Now first of all, this bill probably would have been almost nothing to some of you. It was only a bit over 200 dollars. But I was penniless. Period. 200 might as well have been 2 million.

    So, if they turned the power off... To be reconnected, I would have had to pay the bill. Plus a reconnect fee of almost the same amount. Plus a deposit of at least twice that amount. In the end nearly 800 dollars to get my electricity reconnected.

    Where, if I had just had the money, it would only have cost me the amount I owed on the bill. And I wouldn't be disconnected.

    ~~~

    That is one of the ways in which, being poor, can cost you a great deal.

    Here's how it was solved :

    A friend of mine, who lives a great distance away, put the money in my PayPal account, as a gift to me. I called the elecric company and told them I would pay them the next day. I then drove to town the next day, used the paypal card at an ATM, and then went and paid the bill.

    Now, there was a small fee to use the card. But that is absolutely nothing compared to what I would have paid if I hadn't had that option.

    Another option would have been a wire transfer. For which I would have had to go 65 miles out of my way, ($16.25 in gasoline cost.), wait for it, pay a much larger fee. Etc.

    You can see why the paypal card makes being poor, a bit less expensive.

    The other card I want to keep is the Lowes card. Two reasons.
    1. Lowes is the ONLY other credit card company that has never ever 'been creative' with my account, to cost me extra fees. They have always been a dream to deal with.
    2. Being poor, if the plumbing or electrical breaks, and needs fixed... Or if the heater breaks in the middle of winter... You are SOL. But with the Lowes card, I can get what I need, and then pay for it in payments I can afford. Catastrophe averted.

    #2
    Well.....I didnt read your entire novel. Your reasons for filing and on whatever amount are your decisions. I am not here to judge...after all...I filed too!

    BUT, unfortunately, YES, you will need to include ALL of your debts....including the small credit cards. Now, IF by some miracle you can get them to a zero balance, before you file, MAYBE they will remain open for you after the BK is done. Most of the time not though...even those that have no balance are usually closed by the issuers. But most importantly is that if there is ANY balance on the cards, you must include them. Also, if you were to pay them off too close to filing, and the balance was over 600.00 on either of them, there would be a problem with "preferential" payments. Do a search and you ll learn what that is... This issue wouldnt affect YOU in the bankruptcy, but the BK Trustee may go back to your creditors and get that money. THEN they assuredly would close your cards.

    So, my advice is that you just bite the bullet, save the money you were going to pay on those cards, and then try and rebuild after you are done.

    Best to you in the process. READ READ READ here and you will get through it much easier.

    Comment


      #3
      The previous poster is correct. ALL of your debt must be listed in your bankruptcy petition.

      Is your Paypal Card a true MasterCard or the Paypal Debit Card with the MasterCard logo?

      I believe both Lowe's and the Paypal card are issued by GEMB (G E Money Bank) - you could use the search feature here and read about other's experiences with them.

      My hubby had a -0- balance Paypal MasterCard and it was closed by GEMB within days of our filing.

      You should probably plan that those 2 cards will not survive the bankruptcy. By not having to pay the card's payments for the few months it takes to get a comfortable distance from your last charges, maybe you can have a small savings account or get a secured credit card after your discharge.

      Curiosity makes me ask this: How are you planning to pay a BK attorney? Here in SW Washington a BK attorney was $1500 and up plus filing fees. Do you have any assets or are you considered "judgement proof'? In other words, if you just stopped paying the payments on the closed cards you owe on, is there anything to get in a judgement from you?

      No matter what, I do wish you the best of luck.
      ~~ Filed Over Median Income Chapter 7: 12/17/2010 ~~ 341 Held: 1/12/2011 ~~ Discharged: 03/16/2011 ~~
      Not an attorney - just an opinionated woman.

      Comment


        #4
        I hate what you are going through but alas, sh9730 is accurate. Most cards close once you go bk. I know it is hard, but hang in there. I filed with only about 4,000 in cc debt, but my house payments, once I was laid off, were just too much so I filed to get rid of the house and its relative expenses.

        People here will respond and help you out. There are many beautiful souls here who have gone through this and now help others.

        Comment


          #5
          Thank you for the responses.

          My apologies if I was out of line posting the "novel".

          To answer a couple of questions :

          I can't afford a lawyer. I was planning on doing this by myself.

          I have the PayPal debit with a mastercard logo, but I also have credit from them.

          I am pretty much "judgement proof". Yes, I could be taken to court. And yes, I'd lose. The court would say I owe them the money. But there is nothing that can be taken.

          Aside from a garnishment of my SS Retirement. Which is considered legally, an "income" that can be garnished. But as I understand it, my income is so low that I don't think a garnishment can legally be done.

          ~~~~~~~

          So, from what I am understanding...

          If I file BK, I am going to lose all the cards. No matter what.


          What is the likely result if I just stop paying on the cards that I don't want to keep ? (Without filing BK.)

          What can the CC companies do if I don't have anything they can take away from me ?

          Comment


            #6
            Sea,

            The novel is no problem....I was just saying for me personally the reasons didnt matter.....

            As for the other questions.....that is what Valle is saying....if your only income is SS, and your income is low....AND you dont have any assets for them to attach...then you might be judgement proof and it might be better to just save the time and trouble of filing BK.

            Yes, your creditors CAN file suit, but they often dont.....the bills will wind their way from collection agency to agency and eventually to the Junk Debt Buyers (years down the line)....so you will be subjected to lots of phone calls etc....which in reality may be worse for you in the long run then filing a simple BK and being done with them forever. That is up to you... Your credit is going to be severely damaged in any option, the BK slightly more and for a longer period...but you are not going to get any new credit for awhile anyway.....

            Comment


              #7
              Once again, thank you.

              Exactly. I was not going to apply for any kind of credit again, anyway. Not just for a while, but ever.

              If I can keep the two cards that are useful, that is enough to deal with 'emergencies', and to keep the cost of living, down.

              As for creditors calling... No skin off my nose. I have the power to hang up the phone any time I wish. LOL

              Having to appear in court is the only thing that brings it close to the problems encountered with a BK. And how often can they make me do that ? (And what happens if I don't appear ?)

              Comment


                #8
                Sounds like you are somewhat judgement proof, then. If you stop paying on the other cards (the ones you closed) you will probably get a lot of calls and/or letters but just let the collections folks know you only have SS income and simply can not afford to pay them anymore. They *may* get a judgement against you - but it will be useless unless you win MegaMillions or something.

                Social Security can rarely be garnished (basically for income taxes, government program repayments and child support only). You do need to make sure that your bank account ONLY has SS monies going into it to keep it "safest" from attachment. Also, a written notice to the manager of your bank branch telling them that it is only SS funds in the account is a good idea.

                Social Security and Garnishment:
                Generally, Social Security benefits are exempt from execution, levy, attachment, garnishment, or other legal process, or from the operation of any bankruptcy or insolvency law. The following benefits are exceptions and subject to garnishment:

                (1) to the authority of the Secretary of the Treasury to make levies for the collection of delinquent Federal taxes and under certain circumstances delinquent child support payments; and

                (2) to garnishment or similar legal process brought by an individual to enforce a child support or alimony obligation.

                Section 207 of the Social Security Act provides: "The right of any person to any future payment under this title shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this title shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law."

                However, section 6331 of the Internal Revenue Code of 1954 (26 U.S.C. 6331) which was enacted into law on August 16, 1954, after the enactment of section 207, gives the Secretary of the Treasury the right to levy or seize for collection of delinquent Federal taxes, property, rights to property, whether real or personal, tangible, or intangible and the right to make successive levies and seizures until the amount due, together with all expenses, is fully paid. References: SSR 79-4: SECTIONS 207, 452(b), 459 and 462(f) (42 U.S.C. 407, 652(b), 659 and 662(f)) LEVY AND GARNISHMENT OF BENEFITS 20 CFR 404.970 SSR 79-4 See the code here

                Special Note:
                The Social Security Administration (SSA) recently changed it's rules to allow the collection of overdue Program and Administrative Debts using Administrative Wage Garnishment !

                The regulations dealing with the collection of program overpayment debts that arise under titles II and XVI of the Social Security Act (the Act) and administrative debts owed to the SSA have been modified. Specifically, the change establishes new regulations on the use of administrative wage garnishment (AWG) to collect such debts when they are past due. AWG is a process whereby the SSA orders the debtor's employer to withhold and pay the SSA up to 15 percent of the debtor's disposable pay every payday until the debt is repaid.

                The employer is required by law to comply with the AWG order. These new rules are effective January 22, 2004. (References: SOCIAL SECURITY ADMINISTRATION 20 CFR Parts 404, 416 and 422 RIN 0960-AE92 Federal Old-Age, Survivors, and Disability Insurance and Supplemental Security Income
                Help For Debt Collection Lawsuits and Wage Garnishment. Connect with Debt Help Lawyers and learn how Fair Debt laws and other consumer credit laws protect you


                I don't know what your other cards would do once your credit is affected. I would make sure to not pay them off as they also might lower your credit line to what your new balance is. You will know within a few months what they will do...

                Take the $$ you save from not paying off the closed cards and start a rainy day fund in your safe at home. If you do decide to file the BK, you can use federal bankruptcy exemptions in WA and would have a wild card of ~$10,000 available to protect your savings.

                Best wishes Selador.
                ~~ Filed Over Median Income Chapter 7: 12/17/2010 ~~ 341 Held: 1/12/2011 ~~ Discharged: 03/16/2011 ~~
                Not an attorney - just an opinionated woman.

                Comment


                  #9
                  Welcome to the Forum.

                  Yes, you should plan that you will lose all of your cards. We actually only had two when we filed; the bulk of our debt was IRS, medical and legal. Shortly after we filed, but before we had the 341, we applied for and got a small line of credit at both Lowe's and Radio Shack, and made a couple of small purchases. We understood that this was new debt but at the time of year would be able to pay both in full, when our check came. When it did, we went straight to both places to pay our bills in full, only to find that there was no record of our transactions at either place, even though we had the receipts. There were not traces at all of our purchases or bills.

                  It turned out the the parent company that owned our two credit cards that we included in BK, also owned the credit arms of both Radio Shack and Lowe's, and when we filed, and the parent company was notified, they closed any and all accounts we had including these two new ones.

                  This does not happen very often, and anyone reading this should regard it as a 'fluke' and not expect it to happen to him or her. Our attorney had also not heard of this happening, either.

                  Good wishes to you in whatever you decide to do.
                  "To go bravely forward is to invite a miracle."

                  "Worry is the darkroom where negatives are formed."

                  Comment


                    #10
                    Wow !

                    I am so sooo glad I found youse guys.

                    First, because just reading here over the past few days, had already alleviated a LOT of my stress and anxiety.

                    And secondly, because your help, is helping me to make some difficult decisions.


                    ~~~~~~~


                    And I hope I don't get kicked out of here, if I decide NOT to file BK.


                    Here is the way I am leaning right now :

                    1. Stop making payments to all but the two cards I want to keep. (Continue to use those two exactly as I have, so they don't cut my limit way down. And all the while HOPE they don't just close the accounts because my credit rating is soon going to go through the floor.)
                    2. Wait a couple of months.
                    3. At that time, pick the card that has the lowest amount owed on it, and personally negotiate with the company. Offer them 20 percent, or something of the sort, and see where that goes.

                    If that works, then as soon as that one is negotiated and paid, (probably at least a month or two.), move on to the next one.

                    Any company that refuses to negotiate will simply never get anything at all. (Which would be the case anyway, if I filed BK on them.)

                    ~~~

                    This IS a very difficult decision for me.

                    I did not take out the cards with this intention. I wouldn't do that.

                    Over the years, every card I have, has gotten back every penny they have 'lent' me, plus a lot of interest and fees. So they have already gotten paid. They just want more and more.

                    Comment


                      #11
                      Whether or not you decide to file, be assured that you will ALWAYS be welcome here.
                      "To go bravely forward is to invite a miracle."

                      "Worry is the darkroom where negatives are formed."

                      Comment

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