My wife and I just came from a consultation with an attorney tonight. We have about $68,000 in credit card debt and are hoping to file either 7 or 13. We don't have much equity in our home, so it doesn't look like it will be a problem keeping it. I have a question for you all. We took out a loan from a CC company for $30,000 that was supposed to help us lower our payments and get out of debt this past Aug-sept. The first paralegal we spoke with could not believe that we had a $30,000 line of credit from one credit card company, she said there was no way that they would have given this large amount to us without some kind of collateral to secure it. We have always had perfect credit and until the past couple of years just got in over our heads. I called this CC company when we got home and they said it was a unsecured line of credit. The paralegal we first spoke with wants us to file a chapter 13 with them and our payment is estimated to be somewhere around $500 a month for 5 years.
We had a consultation tonight with an attorney from a different company, he recommended us filing a chapter 7. We have made a few ($50-$100) charges in the last couple of months for items like gas and groceries so he wants to wait till mid/end July before we file our bk. He thinks we will be able to keep our home and our cars which are not worth a whole lot.
So my real question is, this large $30,000 loan we took out was mostly used to payoff other credit cards. We took this loan out somewhere last Aug-Sept and our first payment was due in Oct of last year. The CC company deposited the full amount into our checking account at our local bank. All except about $5,000 was spent on credit card transfers. We took out a cashiers check for the last $5,000 and purchased a car for my daughter with this money. I would have put the car in my daughters name but at the time she was only 17. The car is still titled in my name and the attorney doesn't seem to think we will have any problem keeping this car in the bk. I didn't think about it until my wife pointed out on the way home that I failed to tell the attorney that we purchased this car from the last of the money we received from this CC company. Is there anyway this CC company can go back and tell we used the last of the money for this car? Since they just deposited this money in our checking account do they have anyway of knowing or proving what we spent their money on? Will we have to prove what we spent their money on? We got a cashier's check to pay for this car from our local bank, do you think the CC company could figure out and prove we used some of this money for this car? Could we just say we lived on and paid off other CC's with this loan? I'm just really worried and wished that I had thought about it and pointed this out to the attorney. Now we are sorta worried, we don't want it to look like we are trying to do anything illegal here. Is this illegal to do? Would this car be considered a luxury item? Our first car is worth maybe $3,000 and is tied up in our second mortgage. We have two other vehicles besides these that are probably together worth $2,500. So all in all we have 4 vehicles that probably are not worth more than $10,000 all together, so I hope they wouldn't view this as extravagant. I would really rather lose my daughters car (though she would kill me!) and have a smooth bk than to do something stupid and mess the whole bk up. We really have been trying with no luck to get out of this CC mess, last year I took out $22,500 from my 401k to pay on CC, if had any plans on filing a bk I sure wouldn't have thrown that money away. If anybody gives us trouble in this bk it will probably be this CC company, since they are the newest and are going to be losing the most. They will be losing around $30,000 and the rest is divided up among about 10 different companies. We both work tomorrow and will not have a chance to contact the attorney until next week. If anyone has any suggestions we would greatly appreciate them.
Thanks
We had a consultation tonight with an attorney from a different company, he recommended us filing a chapter 7. We have made a few ($50-$100) charges in the last couple of months for items like gas and groceries so he wants to wait till mid/end July before we file our bk. He thinks we will be able to keep our home and our cars which are not worth a whole lot.
So my real question is, this large $30,000 loan we took out was mostly used to payoff other credit cards. We took this loan out somewhere last Aug-Sept and our first payment was due in Oct of last year. The CC company deposited the full amount into our checking account at our local bank. All except about $5,000 was spent on credit card transfers. We took out a cashiers check for the last $5,000 and purchased a car for my daughter with this money. I would have put the car in my daughters name but at the time she was only 17. The car is still titled in my name and the attorney doesn't seem to think we will have any problem keeping this car in the bk. I didn't think about it until my wife pointed out on the way home that I failed to tell the attorney that we purchased this car from the last of the money we received from this CC company. Is there anyway this CC company can go back and tell we used the last of the money for this car? Since they just deposited this money in our checking account do they have anyway of knowing or proving what we spent their money on? Will we have to prove what we spent their money on? We got a cashier's check to pay for this car from our local bank, do you think the CC company could figure out and prove we used some of this money for this car? Could we just say we lived on and paid off other CC's with this loan? I'm just really worried and wished that I had thought about it and pointed this out to the attorney. Now we are sorta worried, we don't want it to look like we are trying to do anything illegal here. Is this illegal to do? Would this car be considered a luxury item? Our first car is worth maybe $3,000 and is tied up in our second mortgage. We have two other vehicles besides these that are probably together worth $2,500. So all in all we have 4 vehicles that probably are not worth more than $10,000 all together, so I hope they wouldn't view this as extravagant. I would really rather lose my daughters car (though she would kill me!) and have a smooth bk than to do something stupid and mess the whole bk up. We really have been trying with no luck to get out of this CC mess, last year I took out $22,500 from my 401k to pay on CC, if had any plans on filing a bk I sure wouldn't have thrown that money away. If anybody gives us trouble in this bk it will probably be this CC company, since they are the newest and are going to be losing the most. They will be losing around $30,000 and the rest is divided up among about 10 different companies. We both work tomorrow and will not have a chance to contact the attorney until next week. If anyone has any suggestions we would greatly appreciate them.
Thanks
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