Husband Works For Large Retailer

[Sammie]

Hi Everyone!

This is my first post & I am a little nervous.

We are preparing to file Chapter 13 & the one question that I have is that my husband works for a large retail Corporation & one of the CC that will be discharged ($2,800) was issued from his company. We are unsure as to try and sell some personal belongings to pay off this bill. Our Attorney advised against this. My question is can he be fired for being in default of the CC.

Thank you for any advise you can give me.

Sammie

[AngelinaCat]

Hi Sammie:

Welcome to the forum. Your attorney is 'spot on' in telling you not to pay that CC. If you pay that one creditor, but none of your others, that is a 'preferential payment'. Since your husband also works for the firm owning this CC, this could be considered an 'Insider Payment' as well. If you were filing a CH7, and you paid off this card, the trustee could take steps to recover that payment, since you had paid that instead of paying all your creditors equally.

Since you are planning for a CH13, the details can be a bit different, depending on how much of a payback plan you enter into.

It is understandable to be nervous, upset, and a whole host of other emotions. Take time to read through the various boards, particularly the 'stickies' and learn as much as you can. Then you will feel much better about it.

[Sammie]

Angelinacat

Thank you so much for the warm welcome and encouraging words.

We didn't know that by paying one or some of the CC bills would look bad.
My one concern is if the Retailer would have grounds to fire my husband although he has been one of the top individual earners for the Company for the last 5 yrs.

This is really making us crazy since we are current on everything & find it so hard to just stop paying our creditors. We will be filing for Chapter 13 next week.

I have been reading some of the posts in the Forums this past weekend before I could post and everyone is so helpful and well informed. I really enjoyed the posts from the young lady that really wants to go to Hawaii, I smiled thinking that we could not go to a family member's Funeral 2 wks. ago b/c it was 600 mi. away & didn't want to pay for a 2 nt. stay in a Hotel or spend the money on gas.

Thank you sammie

[hmsmith]

I am sorry about your family member that passed away.

Welcome to boards. I did not file a Ch 13---we were a 7, but it was also very hard for me to stop paying on CC bills---we were current on all of them as well. I just wanted to say it does get easier, and it will get better!!

[Sammie]

Thank you very much!

The emotions are up and down right now. I actually had a dream last night & in the dream I was asking myself how do I do xyz w/o a CC and I answered myself that is why you are in this situation to begin with.

The funny thing is that both my husband and I have always been disciplined however, we were always the ones helping out family members with their financial messes, Funerals etc. Then we would get caught up in it and justify going on vacation etc. & here we are now with our own mess. sammie

[goon]

One thing worth noting is that in many cases retailer cards are not really issued by the retailer itself but some other credit company. In other words it is possible that his employer is not who would really be filing the claim, ie his employer may not even know of the claim. It is worth looking closely at the card itself or the bill to confirm.

That being said I highly doubt that they would let him go over a claim of that amount of money and on top of that depending on the state laws they would likely face legal issues if they were to let him go in that situation.

[hmsmith]

I understand how you're feeling Sammie, you are not alone! It did take us several months of adjusting on how to live without using credits. We didn't use them for everything, but it was nice to have as a back up if we needed it....and for that reason alone it was a hard adjustment. I realized just how badly we were overextending ourselves each month financially and how often I used cards to fall back on. We've cut back on a lot of eating out, cable, cell phones (got rid of smartphones) and I am couponing at the grocery store. My kids are even learning too!! Hang in there--it will be worth it!

[pamkev]

The posters here are wonderful and very caring. Just remember you are not alone and don't have to suffer in silence. When you feel like venting or feeling sorry for yourself come here your among friends. Pam

[LadyInTheRed]

Sammie, your husband's job should be safe.

From 11 USC § 525 :

(b) No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt—
(1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act;
(2) has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or
(3) has not paid a debt that is dischargeable in a case under this title or that was discharged under the Bankruptcy Act.

If the employer wants to fire him, they could find another reason to fire him or fire him for no reason at all. If they do that, I'd consult an employment attorney to find out if the proximity of the firing to the bankruptcy filing and his performance record are sufficient evidence to file a wrongful termination action. The company would have to be crazy to fire a top earner and risk a wrongful termination suit.

[Sammie]

I tried to post a thank you to all of you earlier but could not get in.

Thank you so much for all of your responses. I know that I am going to have many more questions just beginning this journey & I am really frightened of the unknown. Because of all of your support today I will be able to sleep peacefully tonight.

Have a great night everyone. sammie

[ksgirl38]

Angelinacat

Thank you so much for the warm welcome and encouraging words.

We didn't know that by paying one or some of the CC bills would look bad.
My one concern is if the Retailer would have grounds to fire my husband although he has been one of the top individual earners for the Company for the last 5 yrs.

This is really making us crazy since we are current on everything & find it so hard to just stop paying our creditors. We will be filing for Chapter 13 next week.

I have been reading some of the posts in the Forums this past weekend before I could post and everyone is so helpful and well informed. I really enjoyed the posts from the young lady that really wants to go to Hawaii, I smiled thinking that we could not go to a family member's Funeral 2 wks. ago b/c it was 600 mi. away & didn't want to pay for a 2 nt. stay in a Hotel or spend the money on gas.

Thank you sammie

Hi Sammie!

That was me - the Hawaii thing. I'm sorry to hear you weren't able to attend your family member's funeral. Maybe you'll be able to make a trip to pay respect later.

I'm not an attorney by any means and I know a lot of people are going to disagree with me, but I think I might try to pay off that balance. Or if nothing else, see if you can consolidate it by doing a balance transfer to another credit card. Here's why I think this, although as someone pointed out the credit card is most likely issued by another company, I'm sure that somehow an employee discount must be tied to it. Is that correct? I'm having trouble understanding how your husband has this card and whether or not it's voluntary or a requirement that he carry it for work. Is it something like Kohl's where the only way you can get the company discount is to use their card? My concern would be that if the card was closed due to a bankruptcy that it could get back to the employer. Although it would be illegal for them to fire him, and I can't see it coming to that, it would be possible that he could be placed on some type of probation or if nothing else, under the eye of management. They can always find a reason to fire you if you want, but I'm sure you obviously want to keep this as much under the radar as possible. I don't understand in what capacity your husband works for this company, but I would just be concerned that a credit card from the company he works for being closed out due to bankruptcy could raise a red flag with the loss prevention department at his company. Obviously check with your attorney and see what they say, but if it were me, I'd try to eliminate the debt on that one somehow.

Also, look at the back of the card and determine who it's issued by because if you have any other cards issued by that same company then they might cancel the one from your husband's company also just because it would be the same creditor.

Good luck to you.

[hmsmith]

I'm not an attorney but I think that if you plan on filing CH 13 any time in the next year there is probably no way to pay off $2800 and it not be considered a prefential payment or insider payment. I know for me personally my attorney and the trustee (at the 341 meeting) both asked us if there was ANY one payment we made to a single creditor over $600 in the 6 months prior to us filing.

If you have an attorney I would ask for sure!

[Sammie]

Thank you ksgirl & hm for your responses. Our Attorney said today not to pay that CC, we are filing next week. This is the hard thing for us to stop paying the bills, we have always been current & my dh said today that now he knows what it feels like to be a "loser". Yes, pamkev I think we are feeling sorry for the situation that we got ourselves into & after this is over it will never happen again. Thanks again. sammie

[SMinGA2]

Since you're filing ch. 13, keep in mind that card and others will get some payback assuming they file a claim.

Why its generally advised not to pay:

1) you're bankrupt. Start living now within your means. Waiting will just make things harder when you HAVE to.
2) paying one card and not the others is a preferential payment. The trustee will make the creditor pay the $ back to the trustee, who will spread it out evenly to your creditors. So you accomplish NOTHING by paying it off. (More particular to ch. 7, but there is no purpose in paying it for a ch. 13 either.)
3) even if its $0 balance, there is a 99.999% chance the creditor will find out about your BK when they do a review and will close the account. Don't expect to keep it.
4) transferring it to another card just before filing can result in the creditor for the other card filing an adversarial procedure. Cash advances and balance transfers just before bankruptcy create a BIG red flag.

[SMinGA2]

And as has been said - most retailers don't finance their own cards. I'm not sure that any do.

GE Financial backs alot - like Amazon, HH Gregg, Brandsmart, Walmart.
Citibank backs some, and Capital One backs Kohls. (Maybe others, just don't know of any particulars.)
Best Buy is backed by Household/HSBC though that's changing to Capital One. They have a better tier card also - not sure who backs it.

I think Amazon has one backed by Chase and another by GE. Not sure who backs Target.