what may I expect if I stop making payments

[luckylou22]

Good morning - newbie here.
History: For past year, been living with maxed out Credit Cards (CC) approx #12 store/bank cards at a total of about $65K. I've been making regular payments of the min or $5 or $10 more. HOwever, that has resulted in no money for living after paying mortgage, car payment and utilities. I've been using the small amount of credit balance after a payment to buy food, gas, and meager personal needs. I consulted with a credit agency and they indicated that a DMP would not work because required CC payments and bare necessity living expenses would exceed my monthly income.

I was told of BK 7 and BK 13 along with DMP and advised that since I have steady employment, the BK13 may be an option and I should consult with an ATTY. I pulled my credit reports last night and all accounts are in good standing, did no pull score.

I am stongly considering stopping use of all CC's and in order to have cash for food and gas, I am contemplating not making a payment on two or three of the bank or store cards monthly
A.) What may I expect after one month of not paying, two months. I hear of aggressive contacts from the CC's, will that happen immediately, is it likely my other bank cards interrest would increase?
B.) If I'm maxed out now on others and just make enough of a payment to cover monthly interest, i'll likely get hit by a fee for not paying enough and possibly another fee for going over credit limit due to the fees.
C.) should I consider not paying for several months the same 2 or 3 or bounce around to others?

I expect to have more questions and have been searching and reading this forum. Found a good bit of info about the Chapter 13 process, but not much info on what I would be able to expect from now until the possible C13 process is in place should that be my avenue.

Appreciate feedback
Cheers,
Lou22

[hamburgervol]

I think once you have made the decision to file and have done your free consults with attorneys, I would stop paying all of them. What would be the point in just paying 1 or 2? That money can be used to help pay your attorney and for other living expenses.

[luckylou22]

what to expect...stop making payments

Thanks Ham--
I found another forum section on Collections that is helpful with my questions. I will continue to search on this site

As for why some and not others, I have a few accounts (line of credit and Visa) with my credit union that I've been with for over 30 years and feel like I am betraying their trust in not paying on their accounts. Silly, I am sure, but I do owe this money, I did get myself into this and I do what to pay what I can as I have a good steady employment. But, I am reading...as for accounts, it's all or nothing, can't pick and choose which to apply to BKC13.

regards,
lou22

[SocalBroke]

I can only tell you my experience but I have to say, my situation was almost IDENTICAL to yours. I was so proud of the fact that I was never late on a payment but didn't realize the hole I was digging by charging necessities just to keep paying the cards.

I made an appointment with a lawyer after being about a week late on one of my cards, I knew I was going to file but kept paying as long as possible to avoid the dreaded calls.

I would STRONGLY recommend visiting several lawyers and getting opinions as having a steady job is FAR from being assured you have to file 13, you very well may qualify for a chapter 7. Before seeing a lawyer I was convinced I would have to go with 13 but my lawyer said I should have no problem filing a 7.

As to what to expect after 30 days, for me it was plenty of phone calls which I dreaded at first but once I told them that I was filing for bankruptcy, all of them were incredibly professional and rather nice (can't promise that for everyone). They wanted my lawyer's name and number which I happily gave and they asked for my case number which I didn't have yet (hadn't actually filed) but I told them my lawyer probably had that and to ask him for it. They promised to make a note to contact my attorney only and that was that.

As to increases in all cc's you can pretty much count on it but if you are going to file anyways, does it really matter? For me, it had to be 'all in' or nothing, I listed everything except my car (well, I listed it but with the intent to reaffirm).

If you have credit cards with the bank you have your checking and savings accounts, open a new account somewhere else and move it immediately, they will seize it. Also, even if you don't owe them money or have a credit card with them, DO NOT open an account with Wells Fargo as they will freeze the account automatically until they receive word from the Trustee to release it.

I am now paying cash for everything and wow, what a difference in my spending habits now that I know there is a limited quantity of cash and once it's gone, that's it. It's also nice to know that if I go out to eat, I won't be paying for that meal for the next 3 years with interest.

It's still a little scary as I have my 341 next month, but I still think it was the best decision I ever made. I now feel like there is a light at the end of the tunnel and the future looks brighter than it has in a looooong time.

[DeadManCrawling]

No real point in paying some and not others.

You should not pay any, if you have decided to file.

Your sense of loyalty won't help out those creditors you choose to pay, in fact it will probably hurt them.

If you are paying some and not others, the money, once it crosses a certain threshold, will be taken from them in BK court anyway and spread evenly among all creditors.

So it really doesn't benefit anyone. This is especially imortant if you are paying any friends/family for debts, even legit ones. They could be at risk of having the trustee demand the funds you gave them, to be spread among all creditors.

Good luck!

[luckylou22]

It's reassuring to learn that there are others like me, SoCal! I have a mortgage on my home and a car loan I am hoping to keep and maintain and in my limited (very) knowledge of BK-C7 and BK-C13, I get to maintain them, almost like business as usual under BK-C13

I expect to meet with a lawyer early this week. I like the advice of changing banks as two of my unsecured debts = $18,000 with my credit union where my paycheck gets direct deposited. One of them (line of credit), they will pull from checking if not paid on time..not sure how they would handle the VISA account as I've never been late.

[luckylou22]

Interesting point DeadManCrawling about the obligation to family or friends. I owe my sister $700 which I am going to pay asap (within 2-3 weeks from now) if I choose to go this route and stop payment on the cards to make sure she gets what she lent me. Are you suggesting that this may be compromised or at risk?

Also, a lingering question on paying some and not others, if I have the ability to pay all but less than the minimum, should I consider that? I suppose someone would reiterate, don't pay any and stash extra $$ for lawyer and filing fees, would you say?

[vicmost]

...Also, a lingering question on paying some and not others, if I have the ability to pay all but less than the minimum, should I consider that? I suppose someone would reiterate, don't pay any and stash extra $$ for lawyer and filing fees, would you say?

It sounds like your at the point of no return....Welcome
About 5 months ago I had reached my ropes end and just couldn't pull any more rabbits out of the hat...Before my credit was ruined I consulted with a free credit counselor and laid out all my bills. This really opened my eyes as to the hole I had dug myself into. Anyhow he suggested that I consult with a BK attorney (free initial consultation) this will help you out as to which bills to pay and what path to take.
I know it's hard to stop paying creditors that you have had a long relationship with but it was a BUSSINESS relationship and not personal. Nothing will happen if you don't pay for a month. You will just get a bill with a late charge and larger payments. You might get a phone call or two. The 2nd month they will increase your rate till 29% and the phone will ring more and more..By the 3rd month your payment that was say $200 will now be $1200 and the phone calls increase...And then you will be up all night on the BK forum!
Better talk to a few attorney's and get some info...buy a book on bk and keep researching...Pay your family and friends with small amounts as all your financial records will be reviewed..You will have to account for any large sums of money taken out of your account..
Hope this helps...You are on the right path!

[DeadManCrawling]

Just re-read and saw that you are with a credit union.

Careful on this one, don't leave any money in those accounts when you do stop. Lately there has been a lot of chatter on this forum about cross-collateralization and set-off, which says if you owe the CU money for something and stop paying they can claen out your other accounts to pay it.

Probably wanna read up on this and make sure you understand all those ins and outs.

[frogger]

It sounds like your at the point of no return....Welcome

The concept of bk is hard to swallow until you get to this point. Once you get to the point of no return, it frees up the mind and allows for you to make rational decisions. I haven't filed yet, still planning and getting prepared, but I can tell you that the mental burden has already lifted a lot.

Instead of robbing Peter to pay Paul, I'm planning.

Big difference.....

[luckylou22]

Agreed on the circumstance with the Credit Unions and the need to change my checking and direct deposit. I've been with one since my first full time job (1978). I have cking, line of credit and visa and as you can imagine, direct deposit. I am going to get another checking account, keep the CU open, but change my direct deposit to the new one. The other CU, I have mortgage, car loan and visa - this is USAA and I've done the searches and read with has been referenced with them. They also handle my car and homeowners ins.

Many (if not all) will disagree with me on this - while I am stopping payment on all other unsecured debt, I am going to maintain min payments on the two CU's unsecured debt. NOTE: I was current on all debts with literally no household or personal money except what I could squeeze in credit from a CC after making a payment (yes, it's been a very meager existence lately)

as it stands, as of the 19th & 20th this month, I've missed payments on two unsecured credit cards. I will continue to not pay the unsecured's, stash money for the lawyer, but continue to maintain the CU unsecured accounts. I would welcome all comments on this.

I expect to retain a lawyer next week(after Mem Day) and hope and plan to file mid to late June.

Regards,
lou22

[luckylou22]

Frogger....I am too...in the planning and it's rather liberating to plan for a new start.

Good luck.

[frogger]

Frogger....I am too...in the planning and it's rather liberating to plan for a new start.

Good luck.

And best of luck to you too...