At what point do you stop paying the credit cards??

[midnight]

We've met with two attorneys so far. The first one was ok, but never returned my calls, and the second was a judgmental jerk. I've been talking with another who thinks that we might qualify for a chapter 7. Also plan on calling a few more depending how this current attorney is. (He mentioned I should definitely pay the mortgage over the credit cards....)

We are approximately two months behind on the mortgage. We are also currently in a DMP for $928 a month. I can make the mortgage if I stop paying the credit cards. If we are contemplating bankruptcy (whether it be a 7 or 13) in the next couple months, should we just stop paying the credit cards now?? Just wanted to get advice from those who have gone through it.

I was a couple days late on the second mortgage payment with National City, and OMG they are RELENTLESS with the phone calls and it was driving me nuts. So once I decide to stop paying the creditors, I will just have to expect it to get worse (and embarrassing if I have people over and the phone just keeps ringing, guess at that point, I'll have to unplug it???). It's hard for me to imagine NOT paying a bill. Of course, I've been late with bills, but just not paying them? That's going to be hard/weird.

[DeadManCrawling]

It is weird.

And you should stop immediately.

Pay the mortgages of course, and remember you need to be caught up on em (at least the first, not sure how a 2nd works)if you want to keep the house and do a Ch 7.

Use the money you save from cards to catch up.

The card companies will begin to call. You do not have to speak with them, if you prefer not to. Certainly do not let them talk you into making further payments. Do not even agree to for the purpose of "humoring them" or getting them off the phone. Hang up on them if you must.

Once youve retained an attorney you can give them his contact information. Once you've filed they can no longer contact you legally. Some may still do so. Give them your case number and attorney contact info.

It's gonna be a bit nerve-wracking for a while, all those phone calls. You get used to it, really. We haven't paid in 2.5 years, so have had a LOT of phone calls.

Good luck, and welcome!

[midnight]

What happens if I don't qualify for a 7? With all the late fees, etc., won't my monthly payment be higher with a 13 with all that tacked on??

[jojo]

If you can't pay your mortgage, I agree, stop paying the credit cards now. What good will it do you to be up to date on your cards, but being foreclosed upon on your house.
Stop now.

[DeadManCrawling]

What state are you in Midnight?

Different districts view this question differently. Here in Florida (and in many, even most, districts), the prevailing view is this: What matters is your level of debt, INCLUDING mortgage, on filing date. The expense of a surrendered home is included in your overall financial picture. After all, you are still obligated to pay the debt, whether you keep the home or not.

That being said, trustees DO sometimes question this.

I personally am going through this exact scenario. I currently have a home that requires between 5 and 6 k per month in mortgage and utilities. I am also going after a 7. I have sacrificed to the bone and my housing expenses exceed 70% of my income, so even without the mortgage, I will probably qualify once my other expenses are considered, even if they try to throw me into a 13.

You need to go over all this with an attorney and understand more clearly what your options are.

Also, your payment into a 13, if that's where you end up, has nothing to do with how much you owe, generally speaking. It has to do with what you can PAY, according to the formulas.

Some people end up paying 100% of all debt. Some end up paying ONLY to get caught up on a mortgage and perhaps on a car or taxes. It is way too complex to explain or understand in one post. Please avail yourself of the search function (upper right of screen in the blue bar) to learn more.

Many times, credit cards (the lowest rung on the ladder) get absolutely nothing in a 13 while you, the debtor, gain the benefit of catching up on the things you wish to salvage (mortgage, car, etc) and the things that cannot be forgiven anywa (taxes, of course).

If you happen to be in Florida, PM me, as I have some serious insights into this, since I am in a nearly identical situation.

Best wishes,

DMC

[Rick9972]

Sometimes you reach that very uncomfortable situation where there are not any "good" answers.

At this point you forget everything and everyone else and do what is best for you and your family. Do not ever forget that not a single CC company is your friend or has your best interests in mind. If you need the house for your family, then the decision is made.

[midnight]

Thanks everyone. Lots to think about. Oh, and I'm in Illinois.

[paradiddle]

The attorney I saw said that unsecured (CC) debt should be last on the list to get paid. I saw him for advice and he didn't think that I/we would need a BK7. Just stop paying the CC's and maybe make a deal lumpsum deal if I had the cash. they would take 15-20 cents on $1.00.

The cards are in my name and some are personal cards from failed business to the tune of $65K all from same bank. I just got a new $3k card from another lender and pay in full every month. I think I am going to dump these other cards. That will leave about $1300 a month more. and my wife won't be affected because she has her own bank account and cards. ( she pays in full )

A good idea is to get a new phone number, unlisted. Then don't respond to any mail. That way they can't bug you. 7 years from now they will have to drop off credit report anyway. They probably will just write you off and resell the debt.

Learn to live on cash. Its the best way to learn how to budget. You can always get a secured card. I saved $$$ and paid cash for used cars.

[coolgurka]

7 years from now they will have to drop off credit report anyway. They probably will just write you off and resell the debt.

What if the CC companies decide to sue you? Depending on the state, they have x number of years to do that. One then has to live with the judgements if any. Wage garnishments etc too.

[LuciluS]

If you know you are going to file Bankruptcy, Stop paying your Credit Cards. You are throwing away your money. Hopefully, that will leave enough monies to make an attempt at getting your Mortgage caught up IF you intend on keeping your home.

We stopped paying our CCs (except one, balance transfer Aug.) late last Sept. Need to let some income drop off from Feb. 09, so we will be filing 9/30/09 and it will be a Chapter 7.

Paid our Attorney $300 in Sept. (he is now fully paid) & began giving his name & phone # to the CCs when they called. We thought we would be filing in 12/08 or 1/09 so phone calls started back in March.

I was dx with Skin Cancer in Feb. & had surgery in late March, so was able to tell those whose phone calls I did answer we weren't filing until I got an 'All Clear' on my cancer. Even had two wish me luck with my surgery.

Almost lost hubby this past month as his organs were shutting down. He spent a week in the hospital and was off work most of April. Praise The Lord for Income Tax Refund.

I believe the Big Guy Upstairs has been looking out for Hubby and I!
However, will be glad when at least the 1st of Sept. gets here & I can get info to Attorney.

Luci

[Cheeseater]

Stop paying them now and save your money, fix your car, buy clothes for your kids and pay your mortgage.

I had the same problem when I stopped paying in March. I had to throw the payment stubs away because I was terrified of not paying my cc's. At the same time I was late on my mortgage and paying late fees of around $250 plus overnight mail postage. The only reason my mortgage is late is because like cat when it hears the can opener I was conditioned to pay no matter what. Always worried about my credit score and what I wouldn't be able to do in the future. When I approached my wife about BK her biggest concern was how would we borrow 100k for my daughter's college.

If the credit crunch hadn't arrived I probably could have played for many more years. Done a few more refi's and balance transfers. The hardest part of this has been coming to terms with the fact that I have lived beyond my means for many years and the weight has become to great.

I have about 120k CC. 68K with Bofa. Yes they will call: so what. My daughter is 8 and we have caller ID "someone named Card Services daddy". Turn off the phone when company comes over. They call everyday all the time, it's just a machine. I call each one once a week and tell them the same story." significant reduction of income, paying my mortgage and utilities, no I don't know when I will be making a payment". That usually buys a day of peace. Although now that I'm headed towards 90 days I expect them to try harder.
Best of luck to you and your family.

[Billssuck]

I agree, stop paying the credit cards now if you are planning on filing BK. My attorney advised it at our first consult and he said to make sure that I paid my mortgage, HELOC, and student loans on time.

It's very hard to not make payments when you have been struggling for years to try to keep current. But I think of it this way: Many cards I had for MANY years. Most of them have received more in interest from me over that time than what I owe to them now. And once you start to get the calls and see how they try whatever means possible to get money from you, I now feel like I made deals with the devil all of these years and I don't feel sorry for them any longer.