Maximizing CH 7...

[keepmine]

AA hit the nail on the head. You are likely paying $1K a month on your cards. Stop paying on the cards and use the cash for necessaties. Put up with some harrassment for a few months and then file. Many of us have done it that way.

[FoolAndHisMoney]

Finally, a couple of breaths of fresh air from the last two posts. I was starting to feel a little beat up. One of the earlier replies stated they could hardly believe I was asking these questions and that I was in fact being underhanded. I thought this would be a good place to ask these questions seeing that I have no where else to turn except the internet or attorneys (which someone already pointed out will say anything to get my business). Call it what you want, at this point I don't care. I'm not going to keep repeating myself on here because I'm sure someone else needs help. I just want to make sure people go away not thinking I'm some lowly cheat. After almost 15 years of keeping A+ credit, I just wanted to take care of some repairs on my house and home. In case you don't understand yet, I DON'T HAVE THE CASH TO PAY THEM WITH. Did I say that I was going to buy diamonds for my teeth and 24inch rims? I can't use my cards to make the repairs and still pay the minimums. That's why I was going to take the cash advances (which would all go towards keeping up with my payments). I'm not going to do that now and I will seek credit counseling. I'm just like everyone else that's been driven to the point of spending their evenings on a bankruptcy message board...tired, beat down, and ashamed that I have to tell my wife that we might have to do this. Thanks for the help and to the couple of people that understood.

Didn't think I came across that I was "beating you". Hope I didn't give that impression. From everything I researched about bankruptcy and to answer Bobbygirls question, the line is drawn as soon as you decide you need to file then you should stop all charging and stop all usage. Obviously some debtors whether they admit it or not do take a little more since it's sometimes hard to prove.

The only red flag I see with you is as you stated "you have no money" and if you were to take major advances with no money even if you waited a while, it would look like you did it with intention of filing since you have no money to pay. Waiting a year, the trustee may not care, but if the creditor disputes it you would have to explain this to the judge. The 90/70 presumption period is only a part of what they look for. They look back at least 6 months with major advances, but can look back more if your financial condition was not good and you took on debt anyway.

It's not a crime what you're doing. You would just have to pay it back and be in the same shape as you are today with no way of ever discharging the new debt. The emotional rollercoaster of bankruptcy alone would be punishment enough.

[enufsanuf]

Wow! That was a lot of useful information. That's what I needed. I'm sorry if I came off like a whiner on my last post, but I'm just at my emotional limit right now and this was the only place I could put out questions like this. I never thought I would have to do this. AA did nail it DIRECTLY on the head. I've always gotten a big bonus or check from work that would ease my situation back into something managable (at least until my next bonus). Now things have changed and we've been going deeper into debt using our cards for gas, food, and bills. Thanks again for all of the help.

[enufsanuf]

One last thing...This sounds nuts, but the idea of just not paying the bills for a couple of months never crossed my mind. You all are exactly right. The minimums I pay will definitely cover the repair costs. I was so obsessed about keeping up with the payments (thinking something will come along and rescue me for another month) that I was more worried about figuring out how to do the advances. Thanks again.

[anonymuse]

Enuf, some of us don't pay the bills to save up for a lawyer, others just can't pay them, or both. Plus it makes a better case for Ch 7 over 13 since it shows you don't have the disposable income to pay into a plan.

Splurge and get caller ID though--it will lessen the stress to know who's on the other end before you pick up the phone.

[Credit Hater]

My wife and I have finally had the "bankruptcy talk". We've been struggling with bills for a long time and I brought up the idea. Here's our situation:

Married w/two kids
$45K/year salary
Wife is unemployed going on a year (staying home with the new baby)
$154K mortgage (no equity)
$22K car loan
$55K credit card debt
Great credit besides the debt (Mid 700 credit scores and no late payments...yet)

We own:

1999 Mazda P/U
$8K 401(k)

Here's the twist:

I'm tired. Sick and tired. I know I've done this to ourselves, but this weight has been on my back for over 10 years. I spoke to a bankruptcy attorney and he made it sound simple. He said "Come on in, we'll file CH 7 and get all of that unsecured debt wiped away". It's all on three cards.

My main question is this. I still have a lot of available credit on hand. If I was to take some very large cash advances ($15K) and make some big ticket items that we want/need, would there be any red flags or problems that I would face? I would then go into the bankruptcy with almost $100K of credit card debt instead of $55K. I just think that if I don't have a large amount of cash on hand and take care of some expenses (car repairs, home repairs, etc.) that I would end up back in financial trouble.

I'm not a scumbag trying to screw anyone over. I've paid these huge minimums for years without missing a payment. The last years have not been about running up the cards on fun things, it's been more about making ends meet.

Lastly, should I even be considering this first or should I try credit counseling? Any and all coments are welcome.

Whatever you do, don't rob peter to pay paul....thats what I did the last 5 or so months with my credit cards and it only dug the hole deeper because I thought my job income was going to pick up. It didn't and before the balances were completely maxed, I stopped paying AND using.

I still have a lot of available credit on hand. If I was to take some very large cash advances ($15K) and make some big ticket items that we want/need

I kept it real and honest, and only used the cards for stuff I needed for everyday living once I realized the bind I was starting to get into. Quite a few that post here did that, plus some had to file for medical reasons or something else way beyond their control. Right now, you have control of how much further into debt you're going to crawl. So I ain't picking at ya, but understand why some of us here may have "jumped" at you a little. Now theres others with your thinking and ways to bend things to take advantage of what your impending situation may be. Dig into the forums, you'll see ways and I'm not one to say those ways or right or wrong anymore....at first I didn't like it. But after dealing with the creditors and the way they want to screw me and other people, destroy credit ratings just because someone's in a bind??? Shoot for it. I hope they get screwed by every debtor in the country....( sorry, wishful thinking ) I mean, look at my name, lol. My credit score is crap and I don't care anymore. I just care about how my bk route will go once I start the process.

Good luck

[nervousSC]

enufsanuf~

You should be okay not paying your bills to take care of home repairs and attorney fees and the like, this kind of pre-bk planning is okay. I just filed today (Whoo Hoo for me!) and the last time I paid Bank of America was LAST October....the balance was around 10K at the time, it's now 12K. They have been harrassing me via telephone, but haven't received a judgment. One of the most important things I learned from this bulletin board is that you can tell the creditors to only contact you via mail...and you can even change your phone number if you like (I did it last February and it's unlisted and no one has figured it out yet).

Good luck!

[anonymuse]

One of the most important things I learned from this bulletin board is that you can tell the creditors to only contact you via mail

I thought doing something like that would make them push the route towards judgement and garnishing more quickly. Glad to know it worked for you.

[scammer]

My main question is this. I still have a lot of available credit on hand. If I was to take some very large cash advances ($15K) and make some big ticket items that we want/need, would there be any red flags or problems that I would face? I would then go into the bankruptcy with almost $100K of credit card debt instead of $55K.

Ohhhh geez!!!

If scammer would have asked a question like this, although he wouldn't, he would have had the tar & feather treatment from Minny.

[nervousSC]

I thought doing something like that would make them push the route towards judgement and garnishing more quickly. Glad to know it worked for you.

Hmmm....I may have been one of the "lucky" ones?

[keepmine]

I quit paying my cards in April of 05 and filed bk the following Oct.-about a week before the law changed.
I used the money I wasn't paying on the cc debt to make car repairs, buy new tires, and some home repair projects.
I also had some dental work done, got new glasses {subscription sunglasses too}. Paid for a year of ISP service and the Sunday only newspaper subscrption. Then, bought just a ton of food. Not all at once of course but, I had a few marathon shopping trips. All the canned veggies plus, pasta and pasta sauces, tuna, spices,etc. Any meat sale I ran across, I loaded up my freezer.
Plus, new clothes. Nothing extreme but, you always need some dress shirts and pants. Just buy depending on what your workplace considers suitable attire. And finally, I saved money for my lawyer and the filing fee.

[enufsanuf]

If I quit paying/using my cards today, when would be a good time to file for BK? It looks like people here wait awhile before filing. How long should the process take if I only have 3 credit cards? Should I expect to walk away not owing anything? Thanks.

[keepmine]

I'd wait a minimum of 90+ days since you last used the cards.

The bk process will take 90 -120 days.
Prior to filing, you must undergo CCCS counseling from an approved agency. Your lawyer will set that up. You can do it online.
Once you file, a 341 meeting is scheduled. Usually about 30 days from filing. That lasts a few minutes if the paperwork is in order. Then, creditors have 60 days to file written objections. After that, you must complete a debt management seminar and show a certicate before you get your discharge. After discharge, a few weeks go by and the trustee will close the case.
In a no asset Chapter 7, unsecured creditors are completely destroyed.

[enufsanuf]

This scenario sounds so quick and simple. Why are there so many horror stories about bankruptcy if it's this easy? Are the main drawbacks the creditors calling (I can turn the ringer off). Do they all completely stop once you file bankruptcy?

[keepmine]

What horror stories?