Filing and Questions...

[Fightingthis]

Hi everyone. I'm hoping you all have some insight for me here. I met with my attorney yesterday (super emotional!) and he answered my questions but I still would like some input from the experts on here. I didn't think I would ever be here considering a chapter 7! My husband filed chapter 7 a while before we were married, his was so easy (old debts, less than 10k) and pain free. Mine not so much!

I'm in my 20s. I've been carrying quite a bit of credit card debt for several years, around 20-30k, fluctuating. I was diagnosed bipolar in the fall and given an antiphsychotic medication that sent me over the edge manic SO FAST. I was so impulsive I have about 20-25k of additional consumer debt to add to that pile now, starting from August-ish through December 2012. Now that the bills are coming in, we are struggling to make the minimums on our income and I can't believe I got in this MESS.

The debt is spread over 10-12 credit cards, I've spent the last few weeks trying to figure out WHAT I bought and WHAT I put it on. None of the purchases were really luxury, other than a few furniture store purchases (maybe $1500 total?), I bought some new flooring for the house, a bunch of lawyer fees for a custody battle, daily living expenses, $500 laptop, some Christmas. There were only a few new cards, some all old cards that I never used up until this time, and a couple that already had high balances. I don't even know how it added up. It's embarrassing even typing this out but I feel it's important to receive advice based on the facts. I'm current on all the payments right now. The attorney said to stay current on all payments if possible, and that would be best to ward off any adversary proceedings when we file. He advised to file in April, at least 90 days from the last charge. He said, beyond that, it doesn't matter how long I wait. It they are going to AP, they are going to regardless?... I can't afford these minimums forever. He said to file my taxes, I should get about 3-4k back, spend it (pay the lawyer, etc.) and then file after. I just find that weird, spend all the money, then I'm broke, and I have to come up with money from WHERE when these creditors try to sue me?

I don't have any cash advances during that time, one balance transfer of around $2500 in October, and I think another one in August of $2400 (different creditors). He said he's only had one AP since he opened up his office, but has experience in them from when he was working in a BK firm. How common are they? I'm really losing sleep over this! I really was NOT trying to fraud anyone. He said we will settle if anything comes up because it wouldn't be worth going to trial. What will happen? What if they all come against me? I owe BOA like 21k, Chase 14k and I owe Citi probably 18K total, including all of the store credit cards, like Home depot that they own.

I also put some of my county "personal" property taxes on my credit card on my credit card in December since I was putting all our $$ towards minimums and couldn't pay the bill. I read online today that this is non-dischargeable, who's job is this to declare? Mine? The CC's via AP? I haven't talked to the atty about this yet.

I don't have any non-exempt assets or equity in my car/house. It's stressful to think that this "fresh start" may not be a "fresh start" after all...

One last thing, I inherited a truck from my father when he passed away recently. My husband was driving it, but it wasn't in the best shape and he needed something more reliable so we traded it in last Fall (another great idea thanks to this medication!!!!) and got him a new truck. They gave us 6k on the trade in, but the truck was only in my name. I couldn't get the loan in my name on the new truck, so my husband got the truck in his name. The attorney is a little nervous that the trustee may look at this as a "gift" to my husband and try to make my husband pay the trustee the 6K back... Now where is my husband supposed to get the 6K at to pay this back? The attorney was giving me worst case scenario, does this sound likely to anyone? He said since I technically benefit from the new truck too, it might be OK, but just warning me...

What a nightmare! Thanks for any advice...

[pamkev]

Hi and welcome to the forum. First of all breath and try to relax it will work out somehow.

Have you seen other lawyers or just this one if not you need to see others and see what they have to say.

I would think you might have to wait till April to file as some cc might objected those you might have to pay right up to April the others that you haven't charged anything on for awhile you should be okay although I am no expert. Your lawyer is right about the tax refund use it to retain a lawyer go on a food shopping binge spend it before you file.

Once you know your going to file stop paying cc that most likely won't object we stopped in March and did not filed till Aug and the most that happened was very annoying phone calls all the time. Before you stop paying set up goggle voice and change all your inform of your cc to that number including your work number.

As for the truck I will leave that to the experts here.

Pam

[btbeme]

Let time help you here. April might be a bit early for some of this, but that is neither here nor there... unless you are able to get the spending habit under control.

Shortly after BK, you will get an avalanche of offers to help you restore your credit, mostly from credit card companies and auto loan companies. Unless you are able to handle living on a cash-only basis, you may end up in worse shape. I understand about the medications - and the impulses. Make sure that you get whatever help you might need in tying that down before doing a BK.

As for timing... wait as long as you can. I would agree that it is BEST to avoid adversarial proceedings before a BK, as that can complicate (make it more expensive too) a Ch 7. However, in most cases, paying creditors right up until you file is a not so good thing. Why? Well, pay too much and that complicates the Ch 7. You can also probably use the extra cash that you would otherwise dump into minimum payments.

In my opinion, you should stop payments a good 3-4 months before filing. The chances of anything bad happening in that timeframe is small.

I am not sure about the truck, and I cannot guarantee that anyone here can predict an outcome (your attorney is right in his concern).

[bcohen]

The best, easiest, and cheapest way to prevent creditors from attempting to have their debt ruled "non-dischargeable" under the presumption of abuse is to wait more than 6 months from when the last purchase/charge was made before you file for BK. You do not have to keep paying anything toward the debts, and just need to answer their calls every now and then to say that you are the correct person, to prevent embarassing collection calls to friends/family/neighbors/etc. If you quit paying "cold turkey" as I am suggesting, the creditors can huff and puff, but it's extremely unlikely that they will actually sue and obtain a judgment by the time you file (which should be in June or July, since you last used the cards in December).

That being said, you need to also deal with the problem of excess spending on unnecessary items. Bankruptcy is a valuable "escape hatch" from an untenable debt burden, but it really only helps if the root cause of the debt burden is eliminated. Otherwise, you will find yourself in debt again, and in much worse shape because the creditors will show no mercy since they'll know you can't BK again.

[Pjmax]

Hi, and welcome. Please understand that what I am about to say is only because I would like to see you come out of this successfully, it's not a judgement thing. I really think it's way too soon for you to file, if your manic spending is not under control, there really is no point in doing so now, or I think even April. If you were still spending through Xmas, a few weeks ago, I think you need to concentrate on getting stabilized. You won't be able to make the best financial decisions until you have your illness under control. Your doctor can prescribe a new med that you think is working fine for weeks, then out of nowhere you may have another episode. I think you have to give yourself more time, and a lot of patience, to work through this.

That said, I would work out an arrangement with DH if you can. Hand over all cards, CC and debit, and your paycheck. Figure out how much, as in absolute minimum, cash you need in your wallet each week. Once you file, you will have to live without the cards, why not start now. Let DH handle the money. Both of you together figure out a budget to get you by for awhile.

If you stop paying creditors now, the phone calls will start, but if any are going to sue you, it will most likely be 6 mos. to a year, and you will see it coming, and you will have time to avert it. BK isn't a quick fix or a band-aid. Please take some more time, do some more research, work out your meds and spending habits, and ask as many questions as you want to here. The folks on this site are great. We (me, for one) are not all experts, but we help each other whenever we can.

I know you've got a tough road ahead, and my heart is with you.