What to do about Checking Account Advance

[RNY09]

I have a checking account with US Bank. Attached to that account, I have both a line of credit, which has been maxed out at $800+ for months (I pay about $15-$20 a month back to it), and a checking advance, which allows me to advance $500 and then pay back $550 the next time I have a direct deposit. Basically a mini-payday loan. You guessed it, I've gotten into the trap of borrowing the $500 every payday immediately after they've taken the $550 back out of my checking account to pay it back.

So my question is....I plan to switch my direct deposit elsewhere (after my next check goes in this Friday) and include these debts in the bk. I'm guessing that to eliminate a presumption of abuse, I should either 1) NOT borrow the $500 back again this Friday, which really puts me in a lurch, or 2) Go ahead and borrow it but stop the direct deposit and wait a couple months to file.

I know the "right" thing to do would be to stop borrowing against this since I know I'm filing, although living without that $500 would be tough. And in this case, even though I last borrowed against it two weeks ago, the presumption of abuse would be gone since I've paid it off, correct? Even though I still have the separate $800 line of credit in the bk.

I'm confused....

[falken]

My advise would be to pay it back and not take it out agian.

Your problem with option #2 is that you borrowed the money, never made any payments, then filed bankruptcy (even if you waited a few months. You still knew, or should have known, that you would be unable to pay it back).

If you have been paying at least the minimum on the line of credit for at least 3 months, it will be less of a problem, and it is a relatively small amount.

[LuciluS]

You have got to learn to live within a budget. Because during & after BK there will be no more PayDay Loans. I would hope you have stopped paying on all your Unsecured Loans.

If you are not able to live within a budget after not paying on unsecured loans, then BK will not help you. Sit down and go through your checking account for the last 6 months. See where you can trim some expenses.

When we quit charging and paying on our unsecured loans, it was tough the first couple of months. Especially because it was Christmas and my 3 precious grandchildren really didn't understand why Mimi and Papaw Rick didn't give them as much money in their College Funds and cash. They are not old enough yet, to understand.

Again, BK will not help if you cannot live without borrowing money in between paychecks.

Luci

[RNY09]

Oh, Luci...I do know that. The only reason it's an issue right this moment is because we just finally made the decision to file, so this is the first month we haven't paid the unsecured bills and we're trying to get the lawyer fee together. We were just hoping to use my Friday paycheck to pull the fee together, but we'll just have to take an extra two weeks to get the rest of it.

I don't know why it didn't hit me sooner that eventually, I was going to have to bite the bullet and deal with a "short" paycheck. I guess I had gotten so used to automatically renewing the advance every time I got paid. You all know how it is...the mortgage is due, the car payment is due....we were easily running $1500 in the hole every month (hence the need to file!) and rather than face an overdraft, I kept borrowing from the advance. It's way too easy when you can just do it straight through the bank site.

I do have a budget worked out on paper that is looking really manageable once we have the lawyer fee out of the way.

Hope is in sight...I'm just getting impatient.

[LuciluS]

Oh, Luci...I do know that. The only reason it's an issue right this moment is because we just finally made the decision to file, so this is the first month we haven't paid the unsecured bills and we're trying to get the lawyer fee together. We were just hoping to use my Friday paycheck to pull the fee together, but we'll just have to take an extra two weeks to get the rest of it.

I don't know why it didn't hit me sooner that eventually, I was going to have to bite the bullet and deal with a "short" paycheck. I guess I had gotten so used to automatically renewing the advance every time I got paid. You all know how it is...the mortgage is due, the car payment is due....we were easily running $1500 in the hole every month (hence the need to file!) and rather than face an overdraft, I kept borrowing from the advance. It's way too easy when you can just do it straight through the bank site.

I do have a budget worked out on paper that is looking really manageable once we have the lawyer fee out of the way.

Hope is in sight...I'm just getting impatient.

ROFLOL! K Yes, I fully understand. It wasn't easy for us to choke up the money to pay our BK Attorney either. What gets me is your broke & need to file BK & unless you've got the time, patience & fortitude to file Pro Se, you gotta spend Money to File Bankruptcy!!

And on top of finding money to pay the Attorney, you gotta find the money to take a silly pre BK course and then a longer one after you filed. We did the pre course last Oct. over the phone on a Sat. Phone Call lasted, at the most, 10 min. and cost $50. Only good for 180 days, so we will have to take it again, darn it.

The Company our Attorney told us to use doesn't have a website & Dh would have to take off a day to do the course at their place of business.. Dh is a long haul truck driver. He had major medical crises since Jan. 07 & was off work for 7 1/2 mths in 2007. I should have seen 'the writing on the wall' after he went back to work and filed BK already.

Now, we are having to wait until some monthly monies I received drop off. Due to the market tanking, my last payment was received in 2/09. So we will be filing on 9/30/09 using Mar - Aug. Income so we will be under the State Median for a Chapter 7. Praying we don't get a lawsuit before then as it will be a year since we payed our CCs in Sept., except for 1 where I had a balance transfer of $3,500. Our BK Attorney told me to make 3 min. payments & add a bit each month. So I did.

With Dh being a truck driver, he spends a lot of money on the road. You just can't fathom all the little receipts I've received from him. Of course, he usually puts them in a certain spot on Fri. night when he gets in & I'm too tired to deal with them.

I'm also going through our Wal Mart SuperCenter, Dollar General & our local Grocery receipts splitting the food cost from the other items. As I'm disabled, I don't cook very often, so we eat out on Fri. & Sat. nights. When Dh is gone through the week, I live on graham crackers and yogurt. Sometimes I might eat a Lean Cuisine. Easier tho not to cook at all LOL!

After I get through with the above receipts, I will need to tackle our out of pocket medical expenses. I know we spend $500 a month on prescription medicines just so we can stay alive LOL!

I believe we will be way over on most expenses, so having to document everything. One of our bedrooms is an office. There is a path to the PC Armoire & rest of office has papers everywhere

Good Luck and try to be patient (I know, easier said than done!)

Luci