My Story.. (long and rambling)

[BrokenBrklyn]

Ok.
I've had a lot of questions. I feel kind of in the dark and I don't feel like all my questions have been answered by my attorney. I know this forum is a replacement for actual legal advice. Just every time I ask a question my lawyer basically hurries it off or says, "Don't worry about that" or "You don't have to worry about that right now" I've paid him a really large amount for a general Chapter 7 so unless he totally stops returning my calls or gets really out of line, I'm not really changing my representation.

I want to see what you guys think, because I'm really scared and I'm not sleeping at night.

Here's my story:
I'm young. 28. When I opened a lot of these cards, I was 24-25 and a few I've had since I was 18 or 19

40k In debt now over 50 since I started defaulting.

When I opened the cards, I said I made about 40k. I came up with this figure by saying "Oh I've been working consistently at 200-250 a day sometimes it's 300 a day, and 3 days a week is a conservative estimate" Not taking into consideration business expenses, etc because at the time of opening the cards, I was new and didn't know I could deduct all these things on my taxes. Besides, I was using the cards to pay for things related, to it so I would consider my before business income right? And I was young and talent and everyone thought it would just be a matter of time before I got an agent and 30k in debt would be a drop in the bucket after just a few jobs. Anyway, I haven't come close to that kind of income after business expenses yet.

(As you can see, I was delusional and really bad when it comes to money.ha!)

The debt was from a combination of living off cards, doing unpaid shoots for work to build a professional portfolio, not paying off the cards when I would get reimbursed for things because I would sometimes have to keep the cash to live, and generally because of the nature of my job, I thought I could afford things I would buy, because I would buy and return stuff for jobs, and really, I lost the concept of how much things really cost, and it felt like "I can totally afford these 150.00 pair of shoes, it's not big deal" or because it was just a matter of time before those 1000.00- 1500.00 day rates would come my way (a few did but not enough) or I would get a big job (but by the time the big job came there were other unforeseen expenses that came up or another client might not have paid me, so I would have to use it live off of)

The turning point was in, feb., my limits kept dropping to the point I couldn't even use them to secure wardrobe for work anymore. Work was slow, and I was very concerned about money. I got a few huge payments from work, and paid them toward my cards, I think I was left with about 10.00 in my bank account,and I decided to add up all the debt and realized, in this economy, there was very little chance for me to advance ahead like I maybe could have pre-economy collapse, and that there was no way I'd be able to pay all this off and have things like health insurance, etc. Work was really slow in the beginning of the year, I started averaging about half of my income and I had a check come in and I just couldn't let go of it, because if I did, I wouldn't have been able to live for the next two months. So I started defaulting.

I met with a lawyer and it's now almost time to file and I'm getting nervous.

Why?

1. What I said about my income on the credit applications. I genuinely thought I could meet those expectations of income and that it wouldn't be a problem, and at the time it seemed accurate but I wasn't 100% on the rules or what would be considered income until my 2nd or 3rd year into my "career". Besides, after 3-4 years most people in my position, really start making good money. It just didn't work out for me like I had expected. I'm really scared they're going to try to slap me with fraud or something.

2. Before I had this debt, my mother (who is diagnosed with schizophrenia and a drug addict and that I've often acted as a care taker for) put me on title to a condo she bought in vegas. The property was bought in 2003 and it was paid for by proceeds from a sale of a home in CA that she owned with my grandfather.

Previously, she had inherited a house that was owned by my grandmother, sold it and went through the proceeds, about 350,000.00 in about 9 months. She asked me to be on title at purchase to this new house as a security should anything happen to her, or my grandfather, and to prevent from her selling the property for cash to blow again. I agreed, and didn't know the consequences of this because I was 20 when this happened and I would have done ANYTHING to protect my mother of doing something like this to herself/our family again.

In 2006, she decided she needed to sell this property from the back taxes and because presumably, she was out of money again. I refused. I didn't want to go forward with it because I knew how it was going to end for her. She harassed me on the phone for 5-6 months and made me feel really bad and that I was greedy because I did not want to sign title over to her. I did eventually quick claim the title over to her because I was tired of feeling like a bad daughter (my mother is my only family member so I did not have anyone to go for support during this), not knowing the implications of this. Before she sold the house, I quick claimed the title to her for $0.00.

At closing, she did pay me, not as part owner but as a misc. payout $7000.00 for repayment of loans/to help me with some of my current debt at the time. I used it to pay for living expenses at the time, and to pay off some of my debts at the time.

My lawyer says that they can deny the chapter 7 because I was on title or sue my mother??

I had no idea this whole thing again would come back to haunt me because I thought I was doing something at the time in her best interest. I honestly don't care if they sue her, because I have felt nothing but used by her.

3. Most of my debt is on 1 citi card (about 30k) my lawyer was really concerned about this and said that all my other cards will be easy to get discharged. He wanted to look at the account history on the card. He sent the letter to citi but we have not received any paperwork on the history of the account whatsoever. I asked him if he was still concerned about this, and he said that all that mattered is that he sent the letter, we had proof we sent the letter and that they never responded. He doesn't seem concerned about this now. Any ideas as to why? What's the likelihood they're going to send someone to the hearing?



4. I am concerned my income is too high, in about six months I've made 13-14k. By end of year it will be more than what I made on my 2008 taxes but it's because I'm not operating or spending like I was because I depended so much on the credit cards and I haven't used any since March. My expenses are around 1700.00 and I have yet to pay my estimated taxes for the year. Can I deduct these from my income, if I do end up filing these before I file the bankruptcy case?


Overall, what do you guys think? I think it's really messy and I'm really scared, as if I'm some special case or oddity.

Many Thanks.. Sorry this is so messy and long.. :/

[DeadManCrawling]

I read most of this, some twice.

First, your income was promising at one time, but changed.

This looks at first glance, to me, a slam dunk chapter 7.

Your six month income is well below median for almost any state. You don't (I think) say what state you are in.

If the condo was transferred in 2006, if I read right, you should be okay with the explanation you gave on your post. You may have to explain that to the trustee, but I doubt you have reason for concern. The lookback for real property is ten years, but I think these circumstances will make it okay.

The large Citi card would only be of concern if you charged extravagant items in the last six months or so.

Your long payment histlory will help mitigate any attempt by them to claim fraud.

I doubt you will have any issues at all.

Good luck to you, and please keep us posted.

[DeadManCrawling]

One other thing:

It was the credit card companies duty to verify your income. If you fudged the numbers or made projections that ended up lesss than you expected, that part of things is on their shoulders.

They extended the credit based on your credit history and you cannot get in trouble for that in most cases, unless you swore to a higher income in a court situation or under deposition. The onus is on THEM to verify your income.

[DeadManCrawling]

Also:

Try to sleep well tonight. You seem to have little to worry about, and sound like you could use a peaceful night's rest.

[NoMoreCards]

I agree with DMC.

Get some rest. Your situation does not appear all that complicated in the grand scheme of things.

[BrokenBrklyn]

Well, It wasn't all that promising I guess. I mean that's how I factored income, it just never ended up being near that on my taxes.

Typically with what I do you assist for 3 or 4 years and make anywhere from 20-60k then go out on your own and you can easily make 100k a year. That's the trajectory, and that's the feedback I got from pretty much everyone in the industry. I never made more than like 20k-25k after business expenses, because I put so much money back into doing shoots. All the while you have to remember, a lot went on the credit cards and I would buy large purchases for wardrobe for shoots and jobs but would return the bulk of it once over. I did make some purchases, and some of them were over the "extravagant" limits but well over six months ago, probably more like a year ago, but I was in COMPLETE denial and thought

In the end, the promise to do well and earn more income isn't there due to the fact I didn't manage my finances wisely, the influx of new people entering this field shortly after I started out, and the fact that the same jobs aren't there like they once were before the economy tanked. I'm lucky if I make 2000.00 a month before business expenses, vs the 4-6k I was making before.

Until I realized there was no way to pay it all off, I always made timely payments and always paid more than the minimum whenever I could. I can count on one hand the times I've been late in 10 years on any of my 10+ credit cards up until the beginning of the year.

It looks like I've made more money this year so far, because I haven't really done any shoots, just maintaining things I need to to work for other stylists, but there's really no opportunity as of now or for the forseeable future if I'm not shooting, or putting $ into shoots to make additional income. I have however, taken any possible deduction I can to get my income as low as possible.

In terms of paperwork for the house, I'm submitting the quick claim, an affidavit, the deed to the house, the deed afterward, and the escrow papers that I managed to get by a miracle even though I am no way involved with the sale, as well as the check i did receive and the bank statement showing where the money went to.

Thanks a bunch, DeadManCrawling

[DeadManCrawling]

You should be fine.

Sleep well, this will soon be over.

[OhioFiler]

The condo was an asset of yours and you effectively gave your share to your mother for $7,000. The court may believe the portion you gave to your mother could have been and should have been used to pay your creditors. I don't believe the court will dismiss your case given your explanation but I would expect the court to look toward your mother for some money to pay creditors.

You had significant debt in 2006 and rather than liquidate the asset and pay your debt you gave it all to your mother. In the bankruptcy courts that is a no-no. You may need to be able to prove you were on the title merely as a safety because of your mother's mental illness.

Good luck, things will work out.

[frogger]

Just every time I ask a question my lawyer basically hurries it off or says, "Don't worry about that" or "You don't have to worry about that right now"

Sounds like you're lawyer is giving you good advice. Remember.... you pay him to worry for you. Let him worry about the past while you plan for the future.

Good luck.

[BrokenBrklyn]

The condo was an asset of yours and you effectively gave your share to your mother for $7,000. The court may believe the portion you gave to your mother could have been and should have been used to pay your creditors. I don't believe the court will dismiss your case given your explanation but I would expect the court to look toward your mother for some money to pay creditors.

You had significant debt in 2006 and rather than liquidate the asset and pay your debt you gave it all to your mother. In the bankruptcy courts that is a no-no. You may need to be able to prove you were on the title merely as a safety because of your mother's mental illness.

Good luck, things will work out.

My lawyer said they would dismiss my case and that I have proof to back up my story in regards to the condo, the title change, the escrow paperwork and the quick claim.. He did say they could file legal action against my mother to recover the money, which I honestly don't care about it.

I did speak to my mother recently the first time in close to a year and has said that if it becomes an issue she'd provide a statement saying that I was basically on title incase of an emergency reason and that no monies of mine were used for the purchase. The money is gone, she's disabled and crazy, so it's not like they'd get anything anyway.

[BrokenBrklyn]

dismiss=discharge.. the lawyer said they would discharge my case and then attempt to recover money from her. Sorry about that!

[backtoschool]

I think the trustee will probably go after your mother, but once it is shown that she is disabled and crazy, the trustee will back off. I would expect the trustee to at least contact your mother though.

[DSIG]

regarding concern 1 -- I doubt this is a concern of the credit card companies. Fraud is when you max out a 40k limit in one month and then file for bk. This did not happen. Regarding the card where you are carrying most of your balance, in the large scheme of things this should become mute. I had 180k unsecure debt. My amex card alone was 80k...yes 80k! Amex eventually filed their proof of claim and that was the end of it. No objection, nothing...and that was a pretty hefty balance. Dont worry about the property transfers either. I transferred 2 vehicle titles 3 months before I filed, a big no-no but it became a mute point.

Please get some sleep it will be fine

[BrokenBrklyn]

Hey guys-
So here's the deal. I have the property title of when my mom bought the house and when I went on title, I have the deed transfer (I didn't want to transfer it because I didn't want to see her blow it again but had given up, it wasn't my money that went to buy this property and in the family it wasn't considered mine within the family even though I tried to stick to my guns about it for several months, granted, the law is the law and might be considered a very different thing), I have a copy of the 7000.00 check I recieved at closing for loans she repaid me and about 6000.00 she gave me to help me out with some of my credit card debt at the time. And bank statments showing where my 7000.00 check went to.

In regards to contacting my mother, this is difficult. She bought a small piece of land. Lives with an abusive spouse (not my father), and lives in a half finished house and trailer with no running water and apparently now, no vehicle. The only phone she has is a cell phone I provided her with incase of an emergency and a cell phone of hers that the man she lives with controls. She lives 30 miles from the nearest town and there's no reception. There's also no physical address to where she lives. She had a post office box but I don't know about now and I'm not even sure what it is because I try to keep my contact with her minimal at best. I'm afraid how long this will go on for if the Trustee can't reach her.. She called me recently about two weeks ago but before that I went several months without speaking to her. The only time I hear from her is when she goes with a friend into town or if she has a doctor's appointment because she's trying to get her disability thru her ex-husband's retirement.


She has a history of basically going through money like crazy inbewteen two inherited houses worth 500k and a substantial inheritence of many hundereds of thousands of dollars.. she has nothing. She seems normal when you talk to her on the phone but about 8 years ago she was in and out of mental health hospitals..

I just hope that if anything, and as horrible as it all is, I have these things on my side..

What do you guys think? Will the case just stay open for a long period until the trustee hears from her?

[BrokenBrklyn]

I should say about 500k each.. She basically went thru close to 1.5 million dollars in a span of about 6 years.