Waiting Six Months....or a year?

[magua2]

I used a cash advance check to pay a contractor to do some work on my house. The amount was $12,500. I've made the minimum payments and will continue doing so until I file and I will wait at least six months before I file. I would prefer not to wait a year. Everyone says wait six months to one year before filing when you've made a large purchase, but I haven't read any posts by anyone with any actual experience with this. Has anyone had a creditor object to a charge when made six months before? If so, how much did you charge, did you have an attorney representing you and how long did you wait?

[pinkpeanut01]

Bump, because I'm curious.

[btbeme]

The more time, the better. But anything inside of six months will absolutely draw a Trustee's attention and make your file a little stinky.

Stinky is not good. You want mundane. Mundane is typically a year since cash advances. But six months is pretty much the rule.

[BROKEDED]

Also, what kind of work was done? If the issue gets brought up would you rather say that the foundation was cracked and the house was going to fall in OR my patio was too small and I needed more room for my new jacuzzi and built in grill? DOH! I mean, if you qualify, you qualify...but if it were something that might raise eyebrows then the more time you can put between your filing and that event the better.

[ttg1]

I agree with BROKEDED. I understand the desire for categorical answers but there isn't one. When you have these types of transaction there is a certain amount of risk involved that you don't control. Different trustees are different and what might raise the eyebrows on one trustee will not even come to the attention of another. My opinion is that you should file when you are ready to file and not try to over manage events that are frankly out of your control.

[HHM]

Also, this is not so much an issue for the trustee, the challenge will come from the creditor you defrauded (yes, that is what you did, you used credit with no ability or intent to repay it). HOWEVER, what has been said so far is correct, part of the answer will depend on the use of funds. However, given the amount $12,500, 12 months is the better bet, I think with 6 months you will still draw the objection (especially since it was a cash advance / convenience check).

If the creditor does object, you can usually settle for about half (and sometimes even less) with a payment plan out to 12-24 months.

[tobee43]

we had a "few" bumps in the road ourselves and just for "safety" reasons actually waited 2 years to file. a large part of that was due to being allowed to use the state we moved had an exemption one could use if you were a resident for two years. so we actually went, and i know the term is sometimes used lightly, but we actually went "underground" for that time period. however, many people really can't do that.

i would put as much time between you and the filing as possible as hhm pointed out, due to that amount it may draw some attention, although, i know in this particular state we filed, that 90 day rule was pretty much respected by the trustee's provided there was no concrete evidence of fraud. (that's really just our experience, i'm certain there may be an exception or to).

[magua2]

HHG we were not insolvent if you consider income coming in. I think there have been discussions around that. We had plenty of money to pay everyone each month, made more than the minimum payments and did not make those charges with no intention of repaying.

TTg1 this is an awesome statement "My opinion is that you should file when you are ready to file and not try to over manage events that are frankly out of your control." I'm tired of the fight. Our plan is to file in December, so our 90 days will begin on Sept 1st.

So, if we end up paying 50% of that debt I'm fine with that. It was worth it. We needed it to fix our bathroom which was leaking and falling apart. Would you recommend continuing to pay that one, and not pay anything else? We are non-consumer so we can pay around $5,800 to any one creditor without flagging the preferential payment. Or would paying one and not paying others cause problems? Also, we are close on the 50% non-consumer portion of the debt. Will not paying credit cards result in an increase in the interest and dramatically increase our consumer portion and thus kick us out of the non-consumer? We're only looking at around $40k of credit card debt, and about three months of missed payments, if we don't pay them this month. That's a huge step for us. We've never been late on anything. It's like the point of no return.

[btbeme]

Here's the problem...

The more you pay before you file, the more likely the Trustee will sue those creditors to get your payments back. Now, this does not really involve you personally, but what it DOES do is raise the ire of the creditor. Sure, you paid them several thou in the last few months, but you also borrowed $12k just a few months before that. My bet is that they would raise a stink. And you do not want that.

Now, you can have all of the best intentions, all of the best reasons, and all of the receipts proving that you are a 100% Good Person. I'd vouch for you, in fact. All I can say is that, right or wrong, a Trustee can and will dig a LOT deeper if there are warts on your file. You might come out just fine, but I promise that the process is a LOT easier, less time-consuming, and well worth the time and effort to make sure you have as few warts as possible.

That might mean living in limbo for a while. It might also mean not paying bills and getting sued (just file before you get judgements - those are a pain in the butt). My suggestion - it is only a suggestion - is that you want to be just one of many hundreds of boring files the Trustee has to process in that month. Think boring. Be boring.

Time is on your side here. The PITA of waiting is absolutely nothing compared to the PITA that a Trustee can rain down on you. AngelinaCat can tell you all about that option...

[magua2]

Here's the problem... The more you pay before you file, the more likely the Trustee will sue those creditors to get your payments back. ...

The Trustee can not avoid any payments within 90 days if they are less than $5k. (11 U.S.C. § 547)

I'm not going to pay the creditor $5k in the next 90 days. I couldn't even if I wanted to. Sorry if I wasn't clear on that. I'm hoping to make the house payments AND the health insurance this month and wondering if I need to scrape together the minimum payment to that creditor so that my chances of an AP are less if I file in 90 days. But my question was, should I continue making the minimum payments to that creditor, or will it look odd if I am paying one creditor and not paying others?

I already have a judgment against me on a business debt. And I have three more cases in various stages of litigation, including a trial next month with a judge who has an obvious bias against pro se defendants. Since I have no clue how to run a jury trial, I'm thinking that will end up as a judgment as well. All of this business debt, none of it personal. I'm tired of fighting. At this point I'm finished, the only thing getting me through is knowing that by the end of the year I will have filed and this will all be over with. But I want to do what I can IN THE NEXT 90 DAYS to lesson the risk of an AP.

[btbeme]

But I want to do what I can IN THE NEXT 90 DAYS to lesson the risk of an AP.

Others may have a better answer, but mine is that 90 days will make little difference. I believe you need more time than that to make an AP unlikely. I cannot think of anything that would clarify the circumstances other than not having to explain anything because enough time has passed. The good news here is that we do not have Shaira Law or debtor's prisons, so if you extend for a few extra months, at least you won't have to go to jail or have your hands chopped off.

Not that you wouldn't get a result that you can live with (i.e. paying back the creditor, etc) by filing sooner rather than later, but it will be a painful and drawn-out process. Irregularities cause questions, and the more questions that have to be explained... Well, the Trustee always has the ability to dismiss a case for Totality of Circumstances if they do not feel that you "deserve" to be able to file Ch 7, and essentially force you to a Ch 13 or a six month wait before trying again. I would not wish that on anyone. AP's are not fun, and the reality is that there is a lot to lose in one - cash being one of the most popular.

If you cannot see yourself lasting for more than 90 days, then git 'er done. Just be aware of the price you may have to pay. Within the next 90 days, I cannot think of anything you could do to make it a smoother ride. But I may be missing something.

[magua2]

But my question was, should I continue making the minimum payments to that creditor, or will it look odd if I am paying one creditor and not paying others?

[ttg1]

But my question was, should I continue making the minimum payments to that creditor, or will it look odd if I am paying one creditor and not paying others?

Odd is a subjective term. There is no rule that you have to treat creditors the same down to the penny.

[2manybills]

I think the fact that the credit was used for repairs will make a big difference. Also, who is the creditor. That sometimes makes a difference.

The money was not taken out with the intent of defrauding any one, but rather a necessity to repair your home.

We did a cash advance 6 months prior to filing on Discover, well it was actually a balance transfer. Not a word from them during our BK.