Do people live it up before filing bankruptcy

[epiphany]

Is this true? I mean I owe 58k on 7 cards... I feel kinda stupid paying the minimum balance since bankruptcy is probably looming. but if I don't pay the minimum amount due, what do I do with the money? Hide it under my bed!???

Don't know what you situation is but I filed on 85K on 8/1 Chapter 7. I am under the median and stopped paying my bills in January. A few of them had not been paid for several months before that because I simply couldn't.

Now, without the debts I was paying, I have no money to hide under the bed. Life has its way of taking whatever I do have in some sneaky fashion. What little extra money I have had I have made very necessary purchases with. Towels, sheets, groceries, etc. As soon as I get caught up on the necessities I am going to start saving a little.

If you have money that you don't know what to do with if you stop paying your bills, then you probably will not qualify for a chapter 7 or perhaps you don't need to file BK at all.

Are you using credit now? If you are using credit to buy groceries or other necessites, then that is where your CASH would go. If you think about it, you may find, that there really is no extra money. Stop paying the bills but stop charging things too. Then pay cash for everything and see how much money is left. That will give you a more realistic vision of your situation.

Good Luck to you,

ep

[kornellred]

Hey there Broke1234 - all of the responses to your posting contain excellent advice that you should take time to consider. The old "max out the credit cards" strategy before filing might have worked 15 years ago if you had 3 cards with $2,000 limits and you were already half-way there anyhow.
But these days, where consumers carry large unsecured debt loads and have high limits on the cards - spending patterns are very easy to analyze. Absolutely no way will you get away with something like buying lots of big-ticket items, eating in 5-star restaurants or snorkeling in Aruba (just as examples).

I am in Chapter 13 myself, and this is my 2nd bankruptcy - the first being a Chapter 7 in the mid-1990's brought on by divorce. Deep in my heart of hearts, I realized that I was committing financial suicide years ago. I knew bankruptcy would always be available, and I continued to rationalize my credit card spending. And the little voice inside my head kept saying "you're gonna declare bankruptcy, huh, smart-ass". Now that confession could possibly be construed as fraudulent intent. As the debt load snowballed, so did the recognition that I would eventually declare bankruptcy - out of sheer necessity.
The past is over and done with forever. If I am actually a fraud, it could never be proven by my spending patterns, Oh yeah - I could never have done what you suggested, because I was already completely maxed out on credit lines.

There's lots to think about in pre-bankruptcy mode.

[kimba251]

The more I read these boards the more I get bothered by the "entitlement" some poeple seem to have. Bankruptcy is "meant" to be to help people in real financial trouble. (some by their own doing and some by accidents of life totally unforeseeable) To even have the midset of racking up bills that you have no intention of ever paying is just plain wrong.

Your debts are erased to give you a fresh start. When you start feeling that you should be able to use the system for your benefit you are setting yourself up for failure financially and morally. You should be thinking about what you can do to get out of your troubles and never get in them again.

I don't understand why you would feel that you should get to hide the money and not at least pay some back if you are able. You can't get protection under the law and then decide that the part where you may have to pay something back doesn't apply to you too.

Nothing personal against you just your mindest that I have seen a few others have too.

[twuoo]

To the original poster...if you can 'live it up'...you must not be hurting that badly?

I can't imagine who amoung us could say we were 'living it up' and filing for bk.

Sorry, but that just smacks all over of the flavor WRONG.

[leftyf]

I didn't live it up myself (it was all for living expenses), but I know people who have. In fact, I know someone doing it right now. They all have had no issues whatsoever (and there were some big screens, Vegas trips, etc in there)...just put enough time between your last use of cc's and your filing. I'm not going to "rule" on whether it is right or wrong...any debt not paid back is effectively stealing. The bk laws let people like me and you get out of our debts so we can try to establish normal lives and not spend the rest of our days running from/avoiding creditors (can you imagine the hell?) We admit we are thieves, it is noted on our credit reports and no jail time, broken legs, or injured/slain relatives required. Anyways, I'm thankful for the fresh start and God bless the USA.
Leftyf

[leftyf]

In the interest of full disclosure, I should mention that "all of the people" I know are 4 people and all filed pre-2005 law change.
lefty

[kornellred]

I do not want to hijack this thread, but I would like to offer an opinion (and it's just an opinion) relative to unsecured debt.
Theft (or stealing) is when you take something that does not belong to you. Creditors GIVE you money. When you do not pay them back, you are not stealing. You are simply breaking a promise or an agreement. That is the sole reason why it is not a crime to default (for whatever reason) on payments.
The risk is completely on the side of the creditor - not the debtor. There are, however, some rueful consequences to breaking a promise. In a civilized society, we all depend on each other to do what we say we are going to do.

Fraud is when you take something that someone is giving you on the basis of your promise to provide recompense, but with the full intention of breaking your promise.

It usually takes a lot of time to get into heavy unsecured debt. If this is the case, then the debtor has got to "see it coming" - there's no way a debtor can claim otherwise. Which means the prospect of bankruptcy has been given due consideration for quite some time before the actual decision to file has been made. I am speaking strictly about those of us who have filed BK as an alternative to other solutions.

When you file for bankruptcy, you are asking the US government to nullify your debts. When a federal judge discharges your debt, that means it no longer exists. It does not mean that it is still there but the creditor can do nothing about it.

The courts have no time to examine a debtor's rationale for filing. Fraud is a charge that must be proven in a court of law, based upon irrefutable evidence. It is usually discovered by way of an audit trail exposing the transfer or hiding of assets.

Like Lefty mentions above, "living it up" can be done if you leave a large enough time gap between unnecessary expenditures and the decision to file. If a debtor thinks that he/she can live with him/herself, then he or she might give it a try.

Good luck if you do!

[Cali]

I am sure there are people out there using their CLs to limit and then waiting x amount of months to file.

[AngelinaCatHub]

There is nothing wrong with a “planned” bankruptcy. However the author of this thread states that the planning would be for planned enjoyment, not healing. Character is based upon your word. There are times that things go wrong and bk is a blessing but then “GO AND SIN NO MORE”. BK is not a license to steel, and yes it is theft if you are given money and DO NOT intend to pay it back.

The only celebrating we have done since our discharge, was a better nights sleep. That was worth it all, and NEVER again will I go through this. My CR was 820 as I paid everything ahead and never late. I could walk into any place any time and purchase anything after the credit check. I DON’T WANT GOOD CREDIT AGAIN. I want to be FORCED to pay cash if that is necessary.

I hope our host of this thread has learned from his own thread that we live in a wonderful Country with good people and have a “privilege” to get a reprieve for mistakes made. This is nothing personal and only my opinion. ‘Hub

[Broke1234]

I think for my situation debt settlement might be a better option than Bankruptcy

[AngelinaCatHub]

I think for my situation debt settlement might be a better option than Bankruptcy

Good for you! What you were describing was like, you got a low tire so let the rest of the air out so you can change your spare. Keep the big guns for the future when you may really need bk.

What I suggest is pay all the minimums on every card but the smallest card balance. Then hit it hard two times a month untl zero. Then Shred it. Unless it is an account that costs you money every year, do not close it as believe it or not it dings your credit closing it. Just don't use it anymore. Then hit the next easiest card and since you have one less, add on top of the next and so on, and so on. Stay here and learn bk is not as desireable and is only a parachute to those who are going down in flame. If you only have one engine out, get it started up and keep on going.

Good fortune to you and I'm pleased hearing your decision. 'Hub

[BKParalegal]

ACHUB, Broke is talking about Debt Settlement(negotiating a lump sum payment) not Debt Consolidation("structured payment over time), once again people tend to confuse the terminology.

[AngelinaCatHub]

ACHUB, Broke is talking about Debt Settlement(negotiating a lump sum payment) not Debt Consolidation("structured payment over time), once again people tend to confuse the terminology.

Got it. However, I'm still pleased that the man has reconciled the fact that he is not a bad off as thought. My credit was golden and here in my later years, busted. This fella has years ahead and he will need his good credit. 'Hub

[fltoo]

huh? tangent

[One Half Full]

I actually am one with AngelinaCatHub. I don't ever want perfect credit again. I had such good credit-- that I was allowed to buy a house that cost more than my "budget", and eventually the credit went down the drain. I never want to get loans that easily again.