consult with an attorney

[ByeByeCCs]

Keepmine I totally agree with not using credit after deciding to file, but lets face it many seem to do it as the issue is raised here on the boards quite regularly. Not too many folks come back saying I was asked at an AP when I first consulted with an attorney.(this is just based on what I read on the boards). That being said I agree with you that once you know then it is time to stop using credit. One of the biggest pieces of advice given on this board and given by attorneys in consults is to make sure your transportation issues are done before you file, so people go out and buy cars on credit and give up the clunker they still owe on in the BK, for some reason everyone--apparently even the trustees--seem to condone this practice.

But on a lighter note I must admit I did use credit after my consultation-- While at the Sam's Club snack bar I did accidentally swipe my Sam's Club card with credit instead of my debit card for the Hot Dog Combo--but I have paid this back.

[LadyInTheRed]

Geo, you stated in your other post that you have on $4,000 in debt and want to do everything possible to avoid BK. Using credit cards to pay your living expenses is not a way to avoid BK, especially if you are unemployed. Avoiding incurring additional debt is a much better strategy.

[lillymarlene]

Geo, you stated in your other post that you have on $4,000 in debt and want to do everything possible to avoid BK. Using credit cards to pay your living expenses is not a way to avoid BK, especially if you are unemployed. Avoiding incurring additional debt is a much better strategy.

Ditto. I spent at least 5 years digging myself into more debt to get my self out of debt. It just doesn't work! :-)

[keepmine]

One of the biggest pieces of advice given on this board and given by attorneys in consults is to make sure your transportation issues are done before you file, so people go out and buy cars on credit and give up the clunker they still owe on in the BK, for some reason everyone--apparently even the trustees--seem to condone this practice.

Reason is, you're not discharging this debt.

[ByeByeCCs]

Keepmine, keeping in mind that I agree that the wisest course to take is not to take on additional credit, i still think the example i am giving is an example of acceptable fraud. If a debtor has an operational vehicle, but wants to make sure they have a more reliable car for the length of a 13 they go out and buy a new one and surrender the older one (more than likely still owing on the older vehicle.) What is the justification for stiffing the creditor of the older vehicle when the car owned by the debtor is operational? None, but it is done by many because it is accepted. The creditor owed for the first vehicle gets screwed in the end. I once attended a seminar given by a trustee and he joked about this- everyone going bankrupt has a brand new car.

While I follow the advice of attorneys and wisdom I gain from these boards, some things just seem over the top. I really don't see anyone asking when you first consulted with an attorney during an AP and still maintain that a consult is a consult. Just because you had a consult does not mean you have decided to file bankruptcy. You are exploring the possibility. If was OP I would worry more about the timing of the debt to to time of filing if he or she feels they must take on new debt.

[LadyInTheRed]

Keepmine, keeping in mind that I agree that the wisest course to take is not to take on additional credit, i still think the example i am giving is an example of acceptable fraud. If a debtor has an operational vehicle, but wants to make sure they have a more reliable car for the length of a 13 they go out and buy a new one and surrender the older one (more than likely still owing on the older vehicle.) What is the justification for stiffing the creditor of the older vehicle when the car owned by the debtor is operational? None, but it is done by many because it is accepted. The creditor owed for the first vehicle gets screwed in the end. I once attended a seminar given by a trustee and he joked about this- everyone going bankrupt has a brand new car.

There is no such thing as acceptable fraud. Defaulting on a car loan is not fraud. When a lender makes a car loan, they know the car depreciates significantly as soon as it is driven off the lot. They realize they take a risk and factor that into their cost of doing business. I don't agree that most people buying a new car before filing Chap 13 are replacing a car that they still owe on. They are usually replacing a car that is more than 5 years old and most car loans are shorter than that. If anyone is getting stiffed, it's the unsecured creditors who are getting less because the debtor is paying the car loan off during the BK. But, unless the law changes or a court rules otherwise, it is not fraud to buy that new car before filing.

While I follow the advice of attorneys and wisdom I gain from these boards, some things just seem over the top. I really don't see anyone asking when you first consulted with an attorney during an AP and still maintain that a consult is a consult. Just because you had a consult does not mean you have decided to file bankruptcy. You are exploring the possibility. If was OP I would worry more about the timing of the debt to to time of filing if he or she feels they must take on new debt.

I agree with you here. Besides, if a debtor is asked in an AP about their consultation with an attorney, I hope the debtor's attorney would object to the question. The subject of a consultation with an attorney is privileged information. I think even the fact that they consulted with a lawyer is privileged info.

While it is safest to not charge anything 90 days before filing, I think in most cases, the credit card company is unlikely to oppose a discharge of debt for necessary living expenses, even if within the 90 days before filing. Unlike purchases of luxury goods (totaling $600 with one creditor), they have to prove fraud if the purchases or for necessary living expenses. If they do decide they can prove fraud, I don't think it will be based on a consult with an attorney. I think it would more likely be based on a sudden usage of credit cards right before filing when the debtor previously had not been using cc's. But, it may still be hard to prove without other evidence. The cc company is not going to risk the expense of filing an AP unless they think they have good evidence. A lot of people will turn to credit cards to try to stay afloat, thinking that things will get better later. When things don't get better, they have no choice but to file and may be in such a crisis situation that they can't wait 90 days. I think GEO is sincerely trying to avoid filing BK and is hoping he'll find a job before he is unable to make his payments. I don't think he is the first to think that using credit cards will help to avoid filing BK. If credit card companies were filing APs against debtors for using cc's for living expenses within 90 days of filing, I think we'd be hearing more about it on this board.

Regardless of the risk of an AP, nobody who can't make ends meet without using a credit card should file BK until they can figure out how to live without incurring debt. BK won't solve the problem of earning less than you need to live.

[ByeByeCCs]

LOL, I guess "acceptable fraud" was not best term to come up with to get the point i was trying to make.