Don't know what to do!! LARGE balance transfer 2 weeks before losing job!

[debee]

I spoke to my attorney (or soon-to-be attorney - haven't paid the retainer yet) this morning, and he thinks I should wait 90 days from the BT to file. He also thinks I should keep paying the cars and mortgage. But I don't want to throw money away at the cars if I'm not going to get to keep them anyway.

He said I should pay what I can for the next month or so until I put the 90 days between the BT and filing to show a good effort and intention to pay. THAT seems fraudulent to me, since I know now I will be filing, but I didn't when I took it out. What's the point in putting off the inevitable?

If your income in the 6 months prior to filing puts you over the median for your state, you will have to do the Means Test in order to file a chapter 7. Perhaps the attorney was suggesting you keep paying the secured debt (house/cars) so you can claim those expenses on the Means Test. In some districts you have to be current in order to claim the expenses.

I would expect FIA to kick up a fuss as things stand now. There's a list of exceptions to discharge (11 USC 523) and if you read it, you'll see that certain charges in the 90 days before filing are Trouble. I wouldn't expect a balance transfer to be viewed as a preference unless I lived in a district with that custom/history. There are a couple different interpretations when it comes to fraud (which is what FIA would be asserting if they file an AP) and my posts on the other thread were specific to that OP's location, circumstance & were based on info from pm discussions as well. Although it turned out he did not have the "trigger event" I originally thought he had.

Anyway, it may be possible for your attorney to stave off an AP filing by communicating your fact set to the creditor attorney. You have a trigger event (sudden unexpected job loss) and that makes it more difficult for them to prove fraud. It's not like you were borrowing when you had no ability to repay (which some courts consider fraud regardless of your intention). If you can make minimums for awhile, you will reduce the chances of them ever filing an AP because by waiting/paying you decrease their chances of winning one.

ETA: I would ask the attorney to explain his reasoning. Might expose that he's giving you stock advice regarding your secured debt (presuming most people want to keep their house/cars) and the 90 day window. I know some lawyers don't give much during the free consult, but some do. If I were you, I would talk to a few more. Lots of ambulance chasers and DUI guys migrated into bankruptcy when the economy tanked because that's where the easy money was. I would be looking for someone who was into bankruptcy when bankruptcy wasn't cool.

[pinkpeanut01]

Thank you for all the great info, debee. The attorney we've been speaking with has been doing bankruptcy for 30 years, so I figured he knew what he was doing, but I guess even an attorney practicing the same field for 30 years could've graduated last in his class. If we are going to take our time with filing (which I'm leaning toward at this point), I think perhaps I will take advantage of one or two more free consults.

Unfortunately, as it stands, I can't afford the minimums. I did pay half of the minimum last night though. I'm hoping that helps. If we can, I'll pay the other half as soon as I can, hopefully before I get more late fees. Like you said, I could expect a fuss from FIA too. If I was them, I'd kick up a fuss. It's not fair that they get stuck with a debt AmEx had for over a year, but we also didn't predict such a sudden income loss. I appreciate your clarifications re: the other thread as well.

We qualify for Ch 7 without the means test - not sure if that's fortunate or unfortunate. I guess it's fortunate b/c it's one less thing to worry about, but unfortunate that our income is that low now.

As I mentioned, I am strongly leaning toward waiting now, and paying what I can to FIA to show some good faith. It's about 1 month and 1 week until I put 90 days between the BT and filing, so if I have to put up with 1 month of credit calls, I will if it helps in the long run. I think I'll feel a lot better entering a Ch7 if I know I'm at least outside the 90-day window. And I feel confident that the timing of the job loss shows we weren't being fraudulent. (We even won a complaint against DH's employer for failing to pay all earned wages in a reasonable time.)

Thank you again. I'll update if/when anything changes.

As a P.S., PNC/National City are vultures! For the first time in the 12-year history of the card, we're late on it, by 5 days, and they already called twice yesterday.

[sunshinepa]

Might I suggest Google voice? I used it and really didn't answer calls, just left it ring. My family and friends were advised to call my cell phone so I never answered my landline, just let it go to Google.

By the way, if you want to PM, I had an excellent attorney should you be close to me here in PA! And, a huge, huge BT if that helps!

[pinkpeanut01]

Thanks, sunshine! I sent you a PM.