New member needing some advice.

[wepman]

Here's my story.

My wife (of 12 years) became very ill in the middle of 2012. She had a nervous breakdown and was diagnosed with Major Depression with Psychotic features. Neither of us had ever been sick prior to this. Subsequently, she has been unable to work for the past year due to her condition. Because of the tremendous financial burden I was placed under to care for her, I resorted to using credit cards and later as I was unable to obtain anymore credit traditionally; I used subprime lenders such as Western Sky.

Now, half of my income is going to pay high monthly payments because of the high interest rates. The principle on my accounts is only around $10,000 but after interest were looking at probably triple that with $1,000 month payments. I truly am in a "payday loan cycle".

As we approach October I will be able to get my wife back on insurance (which she lost when she lost her job) and this will drop my net pay by another 300 dollars a month and then, I certainly won't be able to pay my debts .

I believe I need to try for chapter 7 but, my biggest concern is about fraudulent intent. Will going 90 days without using credit help?

[pamkev]

Others will chime in here but if you stop making all the cc payments and payments to the payday loan will you be able to manage all your other bills?

Pam

[tobee43]

first welcome to the forum.

the number one you should know is you are not alone. we have all been there are one time or another. i can especially sympathize with you as the main reason for our filing was as a result of a serious illness.

my firsts suggestion to you would be to consult with an atty. they consult free of charge and will able to give you a very good idea of which direction to take. we are all here to help you, so continue to post your questions, there is always someone here to help you through this.

i hope you wife recovers soon, you will make it through this!

[AngelinaCat]

Hi wepman: Welcome to the forum.

You should go and get several opinions of BK attorneys in your area. It looks like you may have a more complex case than is 'normal'. There is NO BK case that is 'normal', whether 7, 13, or otherwise.

Our membership here will do their best to aid and assist, but that advice is usually based on actual experience.

I feel for you and your situation. I hope your wife gets better soon, but this may be a long, ongoing situation.

When you do talk to these prospective attorneys--one member said she did fine with a telephone consult--, my personal recommendation is to talk to the attorney AND the staff, in person. Most likely you will be dealing with the staff person for your filling out your forms, etc. If you have a 'good' feel for that person and the attorney, you should do well.

[wepman]

Thanks y'all. On a positive note, my wife is improving every day and will make a full recovery. We are tied up in the disability process. She has already been denied once and I'm doubtful that she'll receive any benefits. She might be able to get some light work within another year or so as she improves but by then we'll completely under water.

Pam, if we stopped paying we absolutely could survive. Before all this we lived mostly on cash and neither one of us has an extensive credit history. That's part of the reason I got stuck in the personal loan trap. I only had about 3 grand in savings and we ended up using about 13,000 over the course of a year.

[TRfromillino]

Doesn't disability almost always take more than one attempt?

[wepman]

50% of the time yes. But, as it stands by the time she gets it, if she gets it, we will have defaulted on everything.

[despritfreya]

You should be concentrating on your wife's recovery. Not having to think about the finances will go a long way to helping both of you. Do the bk.

As others have pointed out, initial consultations are usually free. See several attnys and move forward with clearing the debt. Your concerns over "fraudulent intent" are probably not warranted however, now that you are contemplating bk you should stop using them.

Make sure you tell each attny how much you have "run up" within the last year and of that amount, how much in the last 6 months and, of that amount, how much in the last 3 months. The more info you give the better the attny the better the advice will be.

Des.

[bcohen]

Remember that if you quit paying now, it will likely be months--if not years--before the creditors bother to sue, so that could be an option. If you simply quit paying today and file for bankruptcy 6 months or a year down the road, the "lookback period" will have expired, and your creditors will not be able to challenge your right to discharge their debt. If, on the other hand, you file too soon after the debt was incurred, then the creditor could claim that you never intended to repay the debt, that you were insolvent when you took on the debt, etc. The passage of time helps eliminate this risk.

[wepman]

I have incurred some of the debt recently (within the last 30 days). I'm definitely going to contact an attorney ASAP for a consult but, my strategy was to try to clear at least 90 days and file quickly to avoid all the harassment calls and ACH deductions from my checking account. I'm not too worried about the credit cards but, the loan shark companies are going to be a nightmare, I fear.

[pamkev]

I have incurred some of the debt recently (within the last 30 days). I'm definitely going to contact an attorney ASAP for a consult but, my strategy was to try to clear at least 90 days and file quickly to avoid all the harassment calls and ACH deductions from my checking account. I'm not too worried about the credit cards but, the loan shark companies are going to be a nightmare, I fear.

We stopped paying our cc in Feb following lawyers advice and filed in Aug we dealt with the calls by using google voice. I would also close that checking account to stop those ACH from happening again on lawyers okay. Talk to several lawyers as others stated above. Pam

[tobee43]

wepmen, we hired an atty but didn't file for 2 years, mainly because of some of the questions on the petition that needed answering that involved within a two year period of time passage, (did you within 2 years do this or that), and also our new state residency required 2 years before we could claim their wildcard. so you can still retain an atty, but hold off on the filing date. that gives you plenty of time to review your petition and get everything in order.

we also did the same thing and actually i believe it to be true. i paid our cc's up until the last moment possible not allowing the companies the luxury of reporting us late. we have NO late payments on our credit report! other than our mortgage which didn't matter since we surrendered the property and left anyway. the entire mortgage amount is listed IIB on our credit reports. we didn't use our cc's at all for the final year, but payments we did. also in "those" days our court here stuck strictly to the 90 day rule for the creditors to be able to file a claim against you for fraud. so basically if you had (and i don't advise this now), to file your petition exactly 91 days after you last usage of the card our trustee wouldn't have considered the creditors claim. from what i'm hearing now tho, many trustees allow some to come on in and let the creditors fight them. so i think you are being extremely wise to do what your doing.

now the disability, i'm not sure if you need an atty's help on that either. i know many people have ask us have you filed for disability? our feeling is we are just fine with the pension and ss we have and make it, but on the other hand due to the illness we have experienced my dh can never work again and i need to be close to him for care. i am lucky tho and have found firms that hire me and let me work from home most of the time. at times tho, i think we should apply for my other half, but just haven't been able to get to it.

i would keep pushing for it in your case if you feel this is going to be an on going situation, however, it sounds like your wife will hopefully make a full recovery, i will be praying for her!

best of luck and again, keep posting your questions!

[bcohen]

I have incurred some of the debt recently (within the last 30 days). I'm definitely going to contact an attorney ASAP for a consult but, my strategy was to try to clear at least 90 days and file quickly to avoid all the harassment calls and ACH deductions from my checking account. I'm not too worried about the credit cards but, the loan shark companies are going to be a nightmare, I fear.

My advice is not to throw good money after bad, but rather to put enough time between when you incurred the debt, and when you file so that the presumption of abuse does not arise. I would suggest to quit paying all unsecured debts IMMEDIATELY, and close the bank account(s) which the payday loans had access too. Then wait a minimum of 6 months to file, and you will be home free. Sure, the creditors may bombard your phone with collection calls, and stuff your mailbox with dunning letters, but there's not a whole lot else they can do in this timeframe. Also, I very seriously doubt that you have anything to fear from the online payday lenders, as they lack the proper licensing which would be needed to sue in many states.

[DaisysMom]

Hi Wepman,

Welcome to the forum. About your application for Social Security Disability, I used to work for a Mental Heath Agency. Part of my job was to assist our clients in navigating the SSDI application process. I worked with the clients and accompanied them to the SS office to fill out the forms and make application. When they had their first denial, we then went to Legal Aid for help from an attorney. What I learned is that most applications are routinely denied whether they have merit or not. What I think (just my own opinion) is that SS is hoping that you will just give up after you are denied or else you will miss the deadline for appeal and have to start the entire process over. I never saw a case that was approved on the initial application. I have had full blown, hospitalized schizophrenics who were turned down for help until we got legal help to represent them at their appeal.

So don't be discouraged, just keep up with their paperwork. Don't miss any deadlines for information and better yet, if you can get legal representation...go for it. Many lawyers don't charge you unless you win and then they can only take a percentage of any back payments you get. Most times you get paid from the date of your first application as long as you haven't missed any deadlines and filed your appeals timely.

I hope some of this helps you. I am not an attorney and have no formal legal training, I am just speaking from my experience in Ohio. Your state may be different. Good luck.

DM

[AngelinaCat]

Thank you DaisysMom for this excellent post.

In the same way as you describe, I am still on Unemployment Compensation. It is ridiculous the questionnaires one has to fill out each and every time when applying for a week. Because I only work PT and with irregular, fluctuating hours, the paperwork (Internet-work) is even more hairy. Also, my situation does not remotely resemble the choices I must choose from when claiming the weeks.

So when I actually DO get a little tiny payment, I must answer another ton of questions, and have to have a telephonic hearing where I must explain myself and situation (once again!).

I would love to chuck this whole thing into the river, but I figure, as long as the system is trying to pay me, I will play the game and take it.