New here - coming to terms

[TheBajan]

Apparently, if Obama stays in office, there's a chance the laws will change to allow student loans to be discharged in BK (we have $75k). This would be great, but now I don't have a time frame and that makes me anxious. I would like to file and move on with my life. Thanks.

Even if these rumors are true it won't be something that happens overnight. You will have to plan on waiting for an un-defined period of time before filing and it sounds like your income is changing in a way that may affect the filing negatively. I'd check into that also in making your decision to wait or not.

Best wishes to you,
The Bajan

[dmc-2008]

Hello, and best of luck to you . I have just filed a 13 and not had 341 yet so i am a newbie . I read what you wrote about student loans and Obama! I did not know that! My atty told me that i could stop paying mine untill after bk is over in five years but i am going to try hard to keep them up because i want debt gone in five!! I hope i can do it but they dont consider it an expense!!! So maybe i can modify later to include if it kills me to pay or will they just make me defer? Well , good luck on your 7!

[Forthebirds]

Tobee- our rent isn't $2400, that was another poster. I did ask the atty about our rent cost, and she said our rent is $600 under the average for the city, and would not be an issue in a means test. It's crazy expensive to live here, not to mention gas is almost $5/gallon. And yes, child care is almost as much as rent. With additional work hours, rent will be manageable and will be 33% of our income. In the meantime, a family member has offered to help w/ rent if needed.

The atty said we can do a 7 w/out a means test b/c of our income. This is the first month we aren't paying credit cards. How long until they sue? I am just really anxious about all this and I wonder if we are doing the right thing. Hoping I don't regret this down the line. But options are pretty limited. I am so tired of wondering if my debit card will go through at the gas pump, etc.

[tobee43]

Tobee- our rent isn't $2400, that was another poster. I did ask the atty about our rent cost, and she said our rent is $600 under the average for the city, and would not be an issue in a means test. It's crazy expensive to live here, not to mention gas is almost $5/gallon. And yes, child care is almost as much as rent. With additional work hours, rent will be manageable and will be 33% of our income. In the meantime, a family member has offered to help w/ rent if needed.

The atty said we can do a 7 w/out a means test b/c of our income. This is the first month we aren't paying credit cards. How long until they sue? I am just really anxious about all this and I wonder if we are doing the right thing. Hoping I don't regret this down the line. But options are pretty limited. I am so tired of wondering if my debit card will go through at the gas pump, etc.

i need new glasses that's for sure! i thought it was you that was paying that rent. glad to know i had that one wrong!
we only used our debit card and had no problems whatsoever while going through the bk process and ours was a a no asset 7. you also have the choice to take out what you need from you checking account for the month and just pay with cash, which, by the way, you should really try and get use to that way of paying for many things. it will take some, discipline on your behalf, i'm not talking about your phone bill, or electric etc., i just mean everyday items like we have a jar with "food" money and that's what we go into and grab what we need for our groceries. of course, i have my debit card if i run over, but i really try hard not to ever do that. one of the MAIN reasons i did that tho, was to be able to supply the trustee with a clear concise record of our spending which was much easier to do when everything is right on your bank statement. it just made it easier to keep records.

it's normal to be anxious, and scared, actually it's less normal not to be. it sounds like what you are going through now, this is going to help you in the long term even though it may not seem that way in this moment. a no asset 7 as well, means no monthly payments to the trustee office etc., although, many have. just think how nice it's going to be when you actually will be able to start saving money again! so much good to look forward to.

you need to make certain you don't take any cash advances or use, or pay your credit cards at least 90 days from your filing date. once you file, even if you are up to date with your CC payments, most all companies will pull that accounts and you can no longer charge anything. so really the sooner you get use to using "cash" the better.

don't worry about them suing you. first of all, you will filing way before that would happened. as soon as your creditors are issued the notification for the courts they can longer pursue you for the debt, even if the worse scenario did and happen, and they got some type of judgement, after your discharge your atty would just file a motion to vacate the judgment, again that would be the absolute worse of what can happen to you.

best of luck and it will all work out!

[Tater]

Tobee- our rent isn't $2400, that was another poster. I did ask the atty about our rent cost, and she said our rent is $600 under the average for the city, and would not be an issue in a means test. It's crazy expensive to live here, not to mention gas is almost $5/gallon. And yes, child care is almost as much as rent. With additional work hours, rent will be manageable and will be 33% of our income. In the meantime, a family member has offered to help w/ rent if needed.

The atty said we can do a 7 w/out a means test b/c of our income. This is the first month we aren't paying credit cards. How long until they sue? I am just really anxious about all this and I wonder if we are doing the right thing. Hoping I don't regret this down the line. But options are pretty limited. I am so tired of wondering if my debit card will go through at the gas pump, etc.

First, let me say welcome to the forum! There is a lot of good advice and support here. There is no defined time of when a cc company will sue. Some say the rule of thumb is about six months but it can vary. We stopped paying on our credit cards about three months before we filed. I agree that setting up Google Voice will help save your sanity. It was hard to stop paying, and I really felt like a failure. I got over it though!

The time before my husband and I filed was full of fear and confusion. It is normal. We found support and guidance here. Interview a few more attorneys just to be on the safe side. We went with the fifth one we interviewed, and she was the right fit for us. We had some hiccups in our case, but they all worked out because of her hard work. (And her wonderful staff) An experienced bk attorney can let you know the timeline for your filing. Ours did and it worked out perfectly. We were recently discharged in our Chapter 7 case. Try to find other ways to occupy your time and enjoy spending time with your kids! I about drove myself bonkers before we filed. I had so many questions, but I learned to laugh a little through the process.

Preparing to file bankruptcy was an eye opener for my husband and I. We stopped using credit cards a year before we filed. That is because I got laid off. There came a time when I had to choose between heat or paying cc last winter. We live a very simple and cash lifestyle these days. We do not miss cc's. Our relationship has gotten stronger in the process. I wish the same for you and your family. It is merely a business decision. It was the best one for us.

Once we filed, I felt a sense of relief I had never felt. It was a pleasure to tell the creditors that we filed. Soon after, the phone stopped ringing. Today, we have built up a savings account, started saving more for retirement, and just enjoy life. The stress over worrying how to pay the stack of credit cards is gone. It will soon be for your family too. You have to learn from those mistakes though. The ones that brought you to filing bankruptcy. My husband and I have open communication about the bills now and money. We are actually planning our first vacation in years. We have created a budget and live by it. We have tweaked it from the suggestions we have received here.

Today, I work part-time from home. I am so grateful for that. I know that we couldn't be where we are without the help of the people here. It is truly a blessing! I wish you and your family all the best!

[Forthebirds]

Thanks Tater, it's nice to hear that things have worked out for you. I hope I can say the same after this is over.

Tobee, I don't remember the atty saying anything about not paying for 90 days. We had a cash advance in August on one card and that was the last transaction. I have to call two cards this weekend so they don't do their auto payment on Monday. I just don't know if we should be doing this. But what other options are there?! Continue barely making ends meet? No. Husband and I are 30, so maybe it's better we are going through this now and not in 20 or 30 years.

I put my student loans in forbearance. I don't know if it was this thread or another, but someone said student loans automatically go into a forbearance for 6 mo after BK is filed (ch 7)?

[tobee43]

i think you need to re-discuss this with your atty. you cannot take out cash advances.....you may have to pay back the amount that you took the advance on. in other words it may not be dischargeable.

this is straight from NOLO of some of the situations that one can get themselves in:

When the Court Presumes That Your Cash Advance Should Not Be Discharged

If you take out cash advances on one credit card that total more than $875 within the 70-day period before you file your bankruptcy, bankruptcy law presumes that the debt is nondischargeable. If your credit card company files a a complaint for nondischargeability, you will have to overcome that presumption. To do so, you'll have to prove to the court that you did not intend to defraud the creditor when you took out the cash advances. Generally that means showing that you intended to repay the debt and that you did not take the money out thinking you could just discharge the debt in your bankruptcy case.

Cash Advances Might be Nondischargeable Even Without the Presumption

Even if the time period and total cash advance amount requirements are not met, a creditor can still sue you in your bankruptcy if you take out cash advances before you file bankruptcy if it can prove you did so with the intent to defraud the creditor.

Example 1. Angela wanted to buy a formal dress for her cousin's wedding. She found a dress in a classified ad that she liked, but the seller would only accept cash. Angela did not have any money in the bank, so she took a cash advance from her credit card to pay for the dress, which was $500. She filed bankruptcy ten days later. The presumption of fraud does not arise, because the cash advance was less than $875; however, the creditor can still file a nondischargeability complaint. The creditor will simply have to prove that Angela intended to defraud.

Example 2. Kate knew she had to file bankruptcy, because she could not handle her debt load. However, she wanted to attend her friend's bachelorette party, and she needed money. She withdrew a $600 cash advance from her credit card, figuring she wouldn't have to repay it if she filed bankruptcy. She did file bankruptcy 80 days later without repaying any of the money. Her credit card company can sue her for fraud, and if it can prove she took out the money with no intent to repay and with intent to discharge the debt in bankruptcy, she will not be able to discharge the debt.

Example 3. Anne was in a lot of debt, but she was managing it as best she could, although barely. She hadn't paid her car loan in two months. Her grandmother died, and she needed to buy plane tickets to go to the funeral. She took a cash advance of $900 from her credit card to pay for the tickets and for her rental car. When she was paid the following week, she paid $50 towards the debt. Two weeks later, she received a notice that her car was about to be repossessed. Anne quickly filed Chapter 13 bankruptcy to prevent her car from being taken. The credit card company filed a nondischargeability action for the cash advance. Anne may be able to overcome the presumption of fraud by proving that she intended to repay the debt and did not take the cash advance in anticipation of bankruptcy - she made a payment on the debt, and she only filed bankruptcy under threat of repossession.

[tobee43]

OH!!! one more important thing about your "auto" pays.

it took us forever to stop them. the creditors just keep going in to our account trying to grab the money although we canceled the auto pay. our bank, whom i had to argue with claims we approved auto pay and so they pay out the amount. i told them to have the two banks involved prove they had a contract of auto pay. they couldn't and my bank gave me back every dime. of course, this is not the norm.

we immediately changed banks a well. although, we did leave that one open with $10 in it (since we knew after the bk we still needed that account open for "other" reasons).

[TheBajan]

Tobee,
The examples you've given are excellent. The only thing I would add is that our atty told us that if there is a presumption of abuse regarding a cash advance, they can look at cash advances from as far back as two years. However, the norm is six months. I only mention this because I don't know if the rules regarding the length of time vary from state to state or if it's just a case by case basis.

[tobee43]

Tobee,
The examples you've given are excellent. The only thing I would add is that our atty told us that if there is a presumption of abuse regarding a cash advance, they can look at cash advances from as far back as two years. However, the norm is six months. I only mention this because I don't know if the rules regarding the length of time vary from state to state or if it's just a case by case basis.

now that's just down right scary!

[Forthebirds]

Tobee, somehow missed your post about the auto pays! Thanks for the info. We have opened new bank accts (mostly b/c we have a large CC at our current bank) but haven't transferred over $ yet b/c I haven't gotten checks or a debit card. Hopefully we don't have an issue w/ the auto pays. I am calling tomorrow. I've put it off as long as I could. I did put my student loans in forbearance so Sallie Mae has stopped calling.

The last cash advance was $400. Transfer from CC to checking acct. that was mid August and we made a payment since. Not sure if it'll be an issue.

[btbeme]

Really, I would not worry too much about the cash advances, since it will likely be several months before you file BK. Worst case is that you would be responsible for those small transactions. Time is on your side - if and once you decide to file, and once you stop payments, it will take some time before anything bad happens (like a lawsuit or garnishment). Putting time between you and those transactions will make a big difference. And stop using credit! I know the "manly thing" to do is to ignore the obvious and keep fighting, but one of the hallmark, bold-faced, neon indicators of a problem is using credit advances to pay necessities and credit bills. Time for everyone in the family to face reality.

What I would focus on has already been mentioned - living after BK, and doing so within your means. Rent too high? Move, or appeal to the landlord you know. You must figure how it will all work on a cash basis post-discharge.

Other than that, I'd spend some time reading the stickies in the Ch 7 forum, interviewing good BK attorneys, and shaping for your filing. Get to know how you will manage your exemptions and what you need to do to make your file as wart-free as possible. CA has some pretty big exemptions. While I don't necessarily wish a bankruptcy on anyone, I want to help anyone who asks to make it through the process as simply as possible.

[btbeme]

but someone said student loans automatically go into a forbearance for 6 mo after BK is filed (ch 7)?

Yup. Almost always.

[btbeme]

Apparently, if Obama stays in office, there's a chance the laws will change to allow student loans to be discharged in BK (we have $75k). This would be great,

Not gonna happen.

Per changes in student loans enacted last year, almost ALL loans going forward will be federal loans. Same as federal taxes - you will need to be missing a limb or two for consideration of dismissal of those debts. It will be much harder to get student loans discharged (if that is even possible). Write down or discharge of student loan debt will only come with federal service attached, if at all.

[tobee43]

Tobee, somehow missed your post about the auto pays! Thanks for the info. We have opened new bank accts (mostly b/c we have a large CC at our current bank) but haven't transferred over $ yet b/c I haven't gotten checks or a debit card. Hopefully we don't have an issue w/ the auto pays. I am calling tomorrow. I've put it off as long as I could. I did put my student loans in forbearance so Sallie Mae has stopped calling.

The last cash advance was $400. Transfer from CC to checking acct. that was mid August and we made a payment since. Not sure if it'll be an issue.

well that's not over the 800 cut off. but some trustees can be really picky.i don't necessarily agree that it's a non issue. you want NO issues to stand between you and your filing. if you must just wait it out until it is safe. it's always best to be safe than sorry we see it here, what was once a cut and dry situation trustees are ripping and tearing apart. i would just hate to see you not have a debt discharged due to not meeting the time lines.

if you are getting ready to file don't pay anymore. we paid right up to the minute of our 90 day waiting period. why? because it didn't give the creditors time to report us late. it worked for the best for us, as our credit report...well the only thing that looks out of place is the BK and then there is 40 pages of perfect credit. again this was against atty's advise.

i would mention the cash advance to your atty, just to be extra safe. also don't be surprise if those auto pays keep hitting. the most important thing is to advise the banks these creditors no longer have permission to go into your account. best of luck!