Charging on credit cards question

[DYLAN150]

A person who is "collection proof" decides to stop paying his credit cards bills. I know when a person decides to file for bankruptcy there is a 90 day to 6 month law about charging things on their credit card right before filing, but what about when a person who is "collection proof" decides not to pay, do these same laws apply.

[frogger]

If this person is "collection proof" and decides not to pay, then so be it.

[keepsmiling]

After a month or two of not paying, this will be kind of moot as the limits will be lowered and some cards will be closed.

[GoingDown]

Ha! Good one!

[DebtHater]

It's one thing if your collection proof and can't pay your current bills. If you use credit cards with the intention of not paying the money back because your collection proof is illegal no matter how you look at it.

[Flamingo]

One commits fraud when they intentionally use credit cards knowing they are going to file and won't/can't pay the bills. Also, in some states your state tax refunds can be seized by creditors if one thinks they are collection proof. Also reverse the situation - how would you like to have given someone several thousand dollars or so with a promise from them to pay it back and they stop making payments cause they don't want to and your money is gone while they bought things with your money. Most people don't view the situation that way and think they are "owed" something by creditors when it was them initially that agreed to a contract to borrow money or obtain credit.

[bladerunner]

I'm collection or judgement proof and I stopped using my 3 credit cards over a year ago when I had finally run out of all my unemployment and savings(cut them all up). Even though I am still insolvent, I had a processor bang on my door last Sunday to serve me papers(I didn't answer). I called the legal clinic asking why I'm being harassed when -I have no job-no money-and no bank account. She said I should have taken the papers, seen the judge and told the court about my un-collectability. Hopefully a chap 7 is in my future...

Re: Flamingo's, end quote "a credit card is like a snake in your pocket" I love reading that in the bold red. It knocks me back to my senses everytime and reminds me why, I'm where I'm at now, financially. thank u

[DYLAN150]

wow, maybe I typed this question wrong but let me say I have no intent to do anything that is against the law, ...

[GoingDown]

One commits fraud when they intentionally use credit cards knowing they are going to file and won't/can't pay the bills.

While it may technically be "fraud" if it was intentional, based on the definition of fraud, it remains a civil matter, not a criminal matter. Especially when taking into account what the original poster asked-- charging on a credit card and then NOT FILING BANKRUPTCY. JUST BEING JUDGMENT PROOF. Proving the intentions of the debtor at the moment they made the charges on their credit card would be nearly impossible. I have never heard of anyone being prosecuted for this. Never.



Also, in some states your state tax refunds can be seized by creditors if one thinks they are collection proof.

A very rare thing. Although I have heard of this, I have never known anyone who has had this happen to them.


Also reverse the situation - how would you like to have given someone several thousand dollars or so with a promise from them to pay it back and they stop making payments cause they don't want to and your money is gone while they bought things with your money.

Credit card companies go out of their way to make it easy for people who have no way of paying them back to charge thousands and thousands of dollars. They should not give credit to people who can't afford to pay them back. Most people truly should not have a credit card at all. And for those who can afford to pay them back, the limits should be reduced to a reasonable level. I knew someone who had a $92,000 credit card limit. There was no way he could afford to pay that back. That's entrapment.

Most people don't view the situation that way and think they are "owed" something by creditors when it was them initially that agreed to a contract to borrow money or obtain credit.

...

[GoingDown]

I'm collection or judgement proof and I stopped using my 3 credit cards over a year ago when I had finally run out of all my unemployment and savings(cut them all up). Even though I am still insolvent, I had a processor bang on my door last Sunday to serve me papers(I didn't answer). I called the legal clinic asking why I'm being harassed when -I have no job-no money-and no bank account. She said I should have taken the papers, seen the judge and told the court about my un-collectability.

I don't think the judge would have cared at all that you couldn't afford to pay it back, and he would have ruled in favor of the credit card company whether you showed up or not.

The judge may have set up a payment plan at that time, but those can be bad, because then you are telling a judge that you are agreeing to pay the debt, and it is not a good idea.

Unless you honestly don't owe the debt and can prove that you don't owe the debt, showing up in court is a waste of time. Unless you are just trying to stall for time until you can file BK, and you know how to file motions for continuance and discovery, etc. Then it makes sense. But just showing up to tell the judge that yes, you charged stuff on your credit card and now you can't afford to pay it back is just a waste of time, because he or she doesn't care.

Hopefully a chap 7 is in my future...

Re: Flamingo's, end quote "a credit card is like a snake in your pocket" I love reading that in the bold red. It knocks me back to my senses everytime and reminds me why, I'm where I'm at now, financially. thank u

...

[GoingDown]

A person who is "collection proof" decides to stop paying his credit cards bills. I know when a person decides to file for bankruptcy there is a 90 day to 6 month law about charging things on their credit card right before filing, but what about when a person who is "collection proof" decides not to pay, do these same laws apply.

The answer to this particular question is "No." The laws of bankruptcy only apply if you filed bankruptcy. The 90 Day presumption of fraud rule only applies if you filed bankruptcy, not if you just didn't pay it back.

They may sue you and garnish your wages, etc., but you won't go to jail for this.

[DYLAN150]

GoingDown: I have no wages to garnish, Just social security and Disability which I understand can't be garnish by creditors. Lease car, no equity in my house any longer so what are they going to do.

[GoingDown]

GoingDown: I have no wages to garnish, Just social security and Disability which I understand can't be garnish by creditors. Lease car, no equity in my house any longer so what are they going to do.

The short and simple answer in your case is: nothing.

You are judgment proof (some people now call it collection proof-- in that yes, they can get a judgment against you [but they probably won't bother with that since you have nothing to take and it would be a waste of their money and effort] but even with a judgment, they still won't be able to take anything from you).

You will want to get your Social Security and Disability payments sent to a debit card rather than a checking account, so that the money will be safe from any judgment.

http://www.socialsecurity.gov/pubs/10073.html

"Get Your Benefit Payment Through The Direct Express® Card
SSA Publication No. 05-10073, September 2008, ICN 467520 [View .pdf] (En Español) [Audio mp3]
If you don’t have a bank account and you wait anxiously every month for the mail carrier to deliver your check from Social Security, Direct Express® is for you. If you already have an account with a financial institution, ask us about Direct Deposit. Direct Deposit is the easy, convenient way for your benefits to go automatically into your account. "

What is Direct Express®?
The Direct Express® card is a new debit card you can use to access your benefits. And you don’t need a bank account.

With the Direct Express® card program, we deposit your federal benefit payment directly onto your card. Your monthly benefits will be available on your payment day – on time, every time. You can use the card to make purchases, pay bills or get cash at thousands of locations.

And most transactions are free.

The Direct Express® card is both safer and more convenient than paper checks. Anyone receiving Social Security or Supplemental Security Income payments can enroll. No more waiting for the mail or worrying about lost or stolen checks. "

[Flamingo]

Quoted by Flamingo: Also, in some states your state tax refunds can be seized by creditors if one thinks they are collection proof.

Reply by Going Down: A very rare thing. Although I have heard of this, I have never known anyone who has had this happen to them.

I can name several people in a family I know through a relative that live in North Carolina that never pay their bills and have never seen a tax refund cause they just let the refund go each year to pay judgments. Heck of a way to live, huh? Depending in what state one resides, creditors can go after state tax refunds for as long as that judgment is on record.

[GoingDown]

Well, I've never heard of it happening in Arizona.

And if they are eligible for tax refunds every year, their state is withholding too much tax from their paycheck. They should go to their payroll department and raise the number of exemptions they claim so they get their full paycheck and that way, they won't have any tax refunds for the judgment creditor to take.

I always select enough exemptions so that I take home as much of my paycheck as possible, and then I owe taxes every year on April 15th. I would rather have the full use of my money throughout the year, rather than letting the state and federal government have it.