Is longer the wait the better?

[Scream2Death]

Stopped using credit card on June of 07, paid one month after stopped using credit card, and never since then.

Received summons in Jan of 08.(Not responding)

If i hold out till let's say June of 09(till file Bk), does that count in the length of time the trustee can look back into or do they start looking from the day a judgment is filed?

Sorry for this confusing question. Thanks

[FreshLikeADaisy]

Well, actually, a judgement has almost nothing to do with how far a trustee looks back at this or that aspect of your finances, and it's actually the creditor filing an objection to your bk that is far more likely to throw a wrench into the works. There is a starting point for what info you have to provide the trustee in a Ch7 -- 60 days worth of pay stubs and last year's tax return -- but many go much deeper. Mine sure did; I had to provide a year's worth of bank statements, all sorts of things. There are certain instances and transactions in which a trustee can go back 10 years, but that's rare.

Are you specifically concerned about the nature of the credit card charges, or just generally concerned? If you haven't used the card in 6 months, and the charges were not luxury charges, you've really minimized your chances of having a creditor object just by waiting as long as you have, let alone June.

I should add that if the cc charges are the only thing holding you back from filing bk, then go ahead and file now, unless there's a specific reason you're worried about them. You really don't want to have a judgement unless you can help it; a bk will discharge the debt and you can file a motion to vacate to get rid of the judgement itself, but it's an extra pain in the ass. So if you can avoid it, definitely do so. You may even want to look into ways of delaying judgement until you file; there are plenty of folks around here who are answering summons for the sole purpose of delaying the creditor from getting an easy default judgement, but not everyone is up to that.

If you would like more specific opinions on the credit card charges (I gave you my best guess) maybe you could post the details and others will tell you their experiences with how it worked out for them in similar situations. Good luck!!!

[Cali]

FLAD, I thought you had to have 6 mths of paystubs, 2-3 yrs of taxes and stop using CC's 90 days before you want to file. Is this wrong?

And if the items purchased before the 3-6mths, were luxury items, what happens?

[FreshLikeADaisy]

Yes and no.

BY LAW, you have to have 60 days worth of pay stubs and your most current tax return. If you failed to file your most recent tax return (for instance, if you filed bk in '07 but did not file your tax return for '06) that is grounds for dismissal.

However, many trustees use this as a *starting point* only. So yes, I had to supply all this to my trustee. I also had to supply vehicle titles, insurance declarations pages, a year's worth of check copies, '05 and '06 tax returns WITH W2s, a year's worth of bank statements for each acct I have (includding a running balance to include the day I filed) and much more... but no credit card bills, probably because I hadn't used them for a year.

Yet another trustee might have only requested half that. Or twice that! You really don't know until you are assigned a trustee and he/she asks you for paperwork.

The practice of ceasing credit card usage at least 90 days prior to bk is a *generalization* of what is found in the law, which refers specifically to luxury items and cash advances. While it is definitely good practice to stop using them as soon as you know you'll be filing, it is not required across the board: there are people here who, out of sheer necessity, used credit cards until the day before they filed, not knowing any better. To quote HHM from another thread (http://www.bkforum.com/showthread.php?t=20075) the 70/90 day rules are specific to cash advances and luxury items, not all credit card usage. In addition, it's not just that you break these rules; your creditor must file an objection as well: it's not automatic dismissal or anything like that. Here are the specifics (thanks HHM!):

As stated earlier, the exceptions to discharge are listed in Section 523(a) of the BK code. Specifically, your typical unsecured creditor would object using Section 523(a)(2), but that section contains several different types of non-dischargeable debt.

1. $500 owing to a single creditor for the purchase of "luxury" goods within 90 days prior to filing BK.
2. $750 owing to a single creditor for a cash advance (i.e. balance transfers are cash advances) obtained within 70 days prior to filing BK.

The above two rules are known as the per-se rules. The creditor need not prove intent (i.e. fraud), only that the transactions meet the criteria stated. If you have been reading this forum at all, these rules are known and the infamous 70/90 day rules.

So, in general with credit card usage, your worry is not so much with the trustee (though he will definitely want to know where the loot is, if loot is what you were buying ) but with a creditor who files an objection because they feel they can keep their debt from being discharged in your bk.

Hope this helps! Good luck!!!

[Cali]

FLAD, thanks for the explanation.