what would you do? (long)

[justmoved]

Hi All, I have been reading all the postings trying to decide which direction to go. Here's my story.

I have been a stay-at-home for the past 3 years and I just separated from my husband in September of this year. My husband had been out of work for the past 9 months. So in order to avoid an eviction, my daughter and I moved from California to Virginia to live with my sister. And we have now been in Virginia for just 2 months.

During the marriage I had the good credit so all the debt was accumulated by me. I have $60k of unsecured debt (the big ones are American Express and a Bank of America unsecured line of credit). I also have 2 car loans totalling $25k, my husband still has one car in California and he intends to continue to pay for it.
We have no other assets than our cars.

Since I've been in Virginia, I've met with one BK attorney and she said I couldn't file BK for 180 days based on residency requirements. It was a short meeting after that and alot of my questions went unanswered.

At this point, my husband and I, have both managed to find jobs. Mine pays about $24k a year and his is not much more. Therefore he's still not in a position to help me with all this debt or childcare.

My questions are,

1) Since it's so long before I can file, I was thinking of attempting to pay something to each creditor about every 2 months. In an attempt to avoid a judgement being placed on my credit report. Do you think this would be a good decision? Or should I just save my money up to pay the bankruptcy lawyer?

2) Will filing Chapter 7 allow me to keep the 2 cars? I know my husband wants his car but it's in my name. And I want to keep mine also which is in my name.

3) My creditors have never known that I wasn't working. Should I tell them now in an effort to make some payment arrangments or should I not tell them anything yet?

4) I guess my big question is will my credit report look worse from being extremely late with my credit card payments or will it look worse from a bankruptcy?


This month, November, will be my first month missing payments. So I've been researching the internet trying to find out what will happen to me. I appreciate this board and everyone for sharing their stories.

[jp2861]

Do you see yourself in a position to completely pay off your debt within the next 5 years? If no, then go ahead and file. Why continue to suffer with all that debt?

Once you decide that you'll definitely file, stop paying on your unsecure debt and use that money towards attorney fees. It doesn't make sense to throw away good money. If you plan on keeping the cars I would stay current on the payments. If your husband plans on keeping one of the cars he needs to get it financed and in his name.

If your creditors have never known you weren't working what did they use to approve your credit? This may be opening a can of worms if you tell them you were incurring debt and didn't have the income source to pay it back. That's a fraud issue.

Your credit report will look like crap either way. Most folks that file are months and months late, some years late, by the time they file. First worry about taking care of the debt. Worry about cleaning up your credit report later.

I would be talking to some more lawyers. I'm not so sure you got the right advice about having to wait to file. if one doesn't answer all your questions set up a consult with another. Do this until you find one that you're comfortable with.

It sounds like a pretty easy BK to me, other than your husband wanting to keep the car. My wife wanted one of our cars when we divorced. She got it financed in her name and it went in the divorce decree as hers. Pretty simple to do.

[justmoved]

thanks for responding jp

it felt good to write out the whole scenario since i haven't had a chance to really discuss it with a lawyer.

you picked up on the fact that i was attaining credit with no income. it was definitely fraudulent, i always stated my previous employer and income on the application. i always thought my husband would be working and pay it. i was just reading "the tactical bankruptcy manual" and it said all debt must be listed and if the creditor doesn't challenge it, it might be discharged.

will a lawyer knowingly allow me to list debt that was obtained fraudulently?

also, i'm waiting so long to file because of the residency issue.

[jp2861]

Each lawyer is different in regards to ethics, so I won't go there. Now, if you were convinced that your husband would be working and the debt incurred would be paid by his income, then that would be your explanation, IF ASKED. However, the only reason that I picked up on it was because of your comments. I'll say that again...the only reason that I picked up on it was because of your comments. I'm not saying to be dishonest, but don't dig a hole you can't climb out of. The burden of proof lies with the creditor to prove intentional fraud. Why would you want to help them prove their case?

[B12]

They gave you credit mostly based on credit scores, so be quiet and don't mention it to anyone again.

[justmoved]

i understand completely.

[HeatherB]

Good points.

As far as my experience, most credit card companies take a few months to finally send to collections... and then after a few more months...or years, they try for a judgement. Either way your phone will be ringing off the hook in they know the number you currently have. Me, personally, I would not spend another dime on cc payments... also not use the cards (unless you absolutely must and for a necessity - food, gas, electric, etc)

You shouldn't have a problem keeping the car provided that you continue to make payments. Tell you husband he has to put his car in his name and finance it.

The next few months will wreak havoc on your emotions (with the waiting to file, then waiting for final discharge) Come here to vent and share. We've all been there. We KNOW how hard it is on the soul.

Good luck!

[Lindsay]

I hear it is rare to go after fraud in a situation like this and very hard to prove unless it is really major. My sister doesn't work but has her own credit cards. Her husband has a good job and she just writes in his income as "household income." Honestly, I thought thats what you are supposed to do when you are married. Don't most credit applications say household income?

Most creditors give out credit lines based on credit scores. Our creditors regularly upgraded our credit lines after they were initially taken out 10 years ago. They never inquired about our current income which had dropped sharply when they raised our credit lines. It was all by score. I don't think it is going to matter much for you.

[justmoved]

Thank you All

I really wish I could start the process now. I didn't realize how hard it would be for me to reenter the workforce with my current skills, until I arrived in Virginia, and I saw that I was faced with taking a few minimum wage jobs to survive. I really thought I'd land and get hired making $60k.

This board is invaluable. I don't feel as bad having to take the bankruptcy path. Noone I know has publicly admitted to having done it, so this board is the only place I can come to hear about life after bankruptcy.

You all give me hope!

[CindyLou]

see another attorney! You can file after the 61st day. The law says where you have lived the majority of the last 180 days. So if you have live in 3 states it would be where you live the majority of those 180 days! You never have to wait to file. You could file now, it would just have to be in california because you have lived the majority if the last 180 days there....make sense? Many attorneys do not understand this for some reason so find one who does.

[SinkingFast]

Another thing to ask about, if you've moved around a bit,.......... See if you'd qualify to use Federal Exemptions.

When a Debtor/Filer does not qualify to use one State or another's Exemptions, the Law has allowed for people to use the Federal set instead.

Something to ask about.

[SinkingFast]

see another attorney! You can file after the 61st day.

We were told to wait 180 days too.

You have to file where you live. Based on that criteria, I don't think she can go back to CA to file. She resides in VA so she'd have to file in VA.

But possibly different Courts have different views on this requisite. So that's something to ask about too.

Consult around with different BK attnys. I'd suggest at least 3-4. Get different perspectives. You'll also learn a lot, and you'll get to meet and greet. Find THE one you're comfortable working with.

[CindyLou]

Its where you have lived the "majority of the last 180 days". That is in the BK code and I will reference it later today when I am not on my handheld (unless it changed with new law and I missed it...) On the 61st day that becomes the majority of days. Its a lookback of the last 180 days before you file. That's what I was told by 2 out of 3 consulting attorneys when getting ready to file.

[Bandit]

Each lawyer is different in regards to ethics, so I won't go there.

You hit the nail smack on the head there & drove it all the way home!
Ask four attorneys in the same area, the same exact question with the same circumstance and get six completely different answers.

[CindyLou]

I stand corrected....its actually the 91st day....sorry.....must be my old age (haha). If youlve lived in only two states then the majority of 180 days would be the 91st day. I'm still on my handheld at work and not able to reference the definition of domicile. If someone can google it maybe..... domicile majority 180 days ...those are the word I think I used before.