Credit Catch 22

[debitdork]

Hello again!
I have been quiet awhile because I have been doing gabs and gobs of research about my situation and have been trying to find a sensible solution and it really does seem like my only choice is going to be BK - and I'm cool with that now thanks to all of the sage advice and experience of the folks here. Thanks!
Anyway - on to my first and most pressing/timely question.
I am in a credit card minimum payment v/s not using the credit card trap.

-If I continue making my minimum payments on my cards I will not have the cash on hand to pay for anything else (EG- food,gas,clothing,daily misc.) and will have to continue using the CCs to pay for them as needed. No luxury items. Have not had any in a loooong time.
Do I
(A) Stop paying my minimums and start living my cash exsistance that I have been dreaming of?
or
(B) Continue paying my minimums and keep using my cards for necessities? (Which is what has slowly but surely gotten me in this mess to begin with)

I in no way am intending or have ever intended to commit any sort of fraud, as a matter of fact I have gotten myself into this beastly mess by trying to do "whatever it takes" to make sure that these cards got paid - digging a bigger and bigger hole as I went along.
There seem to be several points of view on this and I wanted to see if anyone else was in the same boat right now or had been pre-BK. It seems to me that to change my pattern of behavior would be a fraud. No? To suddenly start or stop doing something that I had not been doing before would be fraudulent. The only problem is that I have been really stupid and have not even started to contemplate this BK avenue until we were down to negative balances on everything and having to borrow money to pay for things that would not fit on CCs. Now we will not even be able to make minimum on the bigger cards.
I consulted with a lawyer and he was a total BS artist and he has scared me to death from calling to set up an appointment with another.
I guess what I am really asking is what is my best course of action about handling these cards in the meantime while I am waiting to actually file? Because I _know_ I am going to file. No doubt. I just don't know exactly how soon I will be allowed to because all of the above mentioned using the cards in order to keep up the monthly payment business.
I am just terrified right now to even try to buy groceries. I have not bought anything and there are things my family _really_ needs right now. Do I use my credit cards? Do I use my cash that I have that I was going to pay the minimum for this month with? Ugh. I'm so confused.

[SamanthaJones]

I am asking the same information- last use of charges, etc.

I see ALL kinds of variances in here, would like to know some personal experiences, as to whether a creditor objected, time of last use, amount, etc. I suspect an avalanche of bankrutpcies is on the horizon- every person I know is in financial straits- some credit cards, some student loans that are an AMAZING obstacle to overcome, the loss of equity in the housing market, etc. I alos read that 2 of 3 chapter 13 filings ultimately fail- so another question is what have the proponents of the new BK legislation gained?

[SinkingFast]

Basically, you do what you can and gotta do.

Some people have had the resources to continue to pay minimums right up to filing day. That's ideal for several reasons. No presumption of fraud. Maintain credit scores as high as possible going into BK so they're as high as possible at the start of rebuilding.

Some people here pay minimums for a month or 2 or 3 after their last charges. Then quit paying their CC's and start living on cash up thru filing BK.

Some people have a few straggling charges at the very end and didn't make a minimum payment the next month. They just quit making payments, start living on cash, and wait as long as possible to file.

Pick what's right for you. What you can or maybe have to do.

[debitdork]

No Judgement?

I think my hand is actually forced here because there is really no way for me to do both. Even if I stopped using my car and did not spend ANY money beyond limited groceries I would not be able to pay the minimums without continuing to use the cards at the same time.
I believe that I am in a unique position here though, and please someone who is a little more enlightened than I correct me if I am wrong, but there is not much they could do to me for a fair amount of time. (I am just trying to buy a few months)
I do not have a job (nothing to garnish)
I have no assets - house is not in my name - car is not in my name and long since paid for (nothing to repo or seize)
I am up to date on everything as of today, but not for much longer.
Is this not considered "no judgement"? or something like that?
Basically - they will not even bother to come after me for a few months once they realize that I have nothing for them to come after, right?

[keepmine]

It'll take some time before anyone sues you-if that's what you mean.
My last credit card payment was in April of 05 and I filed in Oct. About a week before the law changed.
I got the flurry of letters and phone calls but, none of my accounts were even turned over to collection agencies.

You may need to give us a bit more information. If you have no job, how do you pay the bills? Are you married and filing alone? If so, are you in a community property state?

[debitdork]

Wow, thanks for the speedy reply. Glad to know I am not the only one spending my Sunday morning doing this sort of "fun" stuff.

I will be trying to file alone - and we are not in a community property state.

I am attempting to do this in my name alone to protect our house (inflated market in our area creates a false equity in our home & lack of homestead exemption in Maryland) and to at least keep one of our finances in order. My husband's credit is bad, but not as bad as mine.
90% of the unsecured debt is in my name alone, but the house (title and all) is in his name. His unsecured credit is minor/managable and would be nice to keep intact in case of a major incident. (we have 3 children - it could easily happen)

[keepmine]

Nothing illegal about filing alone. What did this lawyer say that scared you?

[debitdork]

He didn't say anything in particular that scared me - it was just his general demeanor that really put me off. He talked to me like I was a 5 year old and that is the only reason I am trepiditious about contacting another lawyer.
He seemed really keen on the idea of our filing together and doing a 13 even though our income is about half of the state's median. (?!) I got the distinct impression that he was only barking up that tree because there is alot more money in a 13 than a 7 around here. (and I understand in general) Again, this comes back to the inflated home market in our area too and the false equity in our home. (At least this is my speculation)
I would really rather simplify things and keep the house & my husband's finances out of it.
Right now I am most concerned about buying time (so to speak) so that i can get some things here in order and find a good lawyer and save some money to pay one when I find one.
How much time can I buy when I have no money?
Is it true that when you've got nothing - you've got nothing to lose?

[keepmine]

I'd not let a bad experience with one lawyer deter you from speaking with others
See if someone from this organization is nearby. Might be a good starting point.

http://www.nacba.com/

Not sure why the home would be an issue if the mortgage and title is in your husbands name.

Is it true that when you've got nothing - you've got nothing to lose?

I look at it a little differently-ain't nowhere to go but up from here!

[debitdork]

I look at it a little differently-ain't nowhere to go but up from here!

That is how I have been looking at it as well, but where we have been I will just be happy to maintain an even keel. Eventually things will be up, but I am jsut looking forward to not being under this weight anymore.

I have found a lawyer on the NACBA website that I plan on contacting as soon as I have some $$ to put down if I decide to go with him. Right now we have nothing. Literally - nothing. Gas cash for DH to get to work and that is it until next paycheck.

One interesting thing I found out by snooping around is that the amount of charging I have done and my balances are not even high enough to hit the radar for the CCs to file an objection. I would be very interested to hear from anyone who has had any of this come up / not come up in their case.

[SinkingFast]

Another place for you to look is the Martindale Peer Review. Look for a rated lawyer. Lots place ads there or are listed there, but few are actually rated.

And definitely Consult around. That "file Ch 13, when I know you qualify for a 7" routine is one of the oldest BK attny tricks in the book. They push you into a 13 knowing full well you cannot afford the payments. That you'll come crying back in a couple of years, asking to Convert to 7. Kah Ching! Double legal fees!!

It'll be a while before any of your Creditors will come after you. I've read Discover is the most active. Debtors only get about 6 months with Discover before Discover moves to sue. That's on average.

But keep in mind, Creditors aren't stupid either. No use spending money on legal fees if you have nothing to get. They'll check your Credit. They'll check the County Records looking for property to put a lien against. If you don't work and don't own property, they aren't gonna waste their money either.

[debitdork]

I found a lawyer on the Martindale Hubbell in our area that has their highest rating (V/A) so he and the other lawyer who is on the NACBA site are my next two calls.

Discover is one of the places I have a debt with. They have been really jerky too. I have had my card with them for 10+ years - never late on a payment EVER - I have charged it up and paid it down several times (when my finance were better) and have been a model customer. Have not even used the card for at least a year. Two months ago my electronic payment was ONE day late because I did not realize that E payments made after 12pm were posted the next day. You know what they did? They raised my rate from 9.9% to 23.49%. My minimum payment doubled! Just like that. When I called to "negotiate" they basically told me "tough". Yeah, they don't fight fair on this end - I don't think they'll be nice on the other side either.

Thanks so much for your common sense breakdown there SF. I really didn't look at it that way, but it is so apparent. They would HAVE to do some investigating before they invested the money into going after anyone. It costs them money to chase money- they want to make sure there will be something there to begin with.
If they look into my finances they will find an empty well with a very hollow echo. Are they going to waste their time with that? I don't think so.

[sharon7070]

My best and only advice when it comes to lawyers.

Read, research and get orginized!

Before you talk to another lawyer do some research about bankruptcy. Know what the terms mean. Know what your state exceptions are. Know what your rights and options are.

Get orginized! I put everything in an expanding file folder. Current bills, past due medical bills, pay stubs, tax papers....everything. I did a quick job estimate of our stuff....assets...wrote it down.

The 1st lawyer I talked to on the phone treated me like a child. I knew nothing about bankruptcy at the time and was unprepared to answer the questions they had for me.

I did a lot of research over the week, got orginized, set up a consult with another lawyer and when we went in I knew what questions to ask, I had ideas about what we could do, I was orginized enough that I could answer his questions just by finding the right papers in my folder and he didn't have to explain EVERYTHING to me. He treated me with much more respect, like an adult and even said I was the most prepared BK client he has spoken to in a long long time .

I think if you know your stuff......or at least some of it.......lawyers will treat you better because they will know that you won't fall for their BS.

[debitdork]

Actually Sharon- I think that might be exactly what got me into trouble with this one guy. Though this is merely my own speculation- I think that some of my questions put him off because I was using legal terms and did seem to know _something_ about the process. EG: I asked about the fine details regarding tennancy by the entirety and the validity of my being judgement proof since we are not in a community property state, etc.
I think that he would have prefered to have an uneducated customer and I can kind of understand that to some degree. On the other hand I think he merely tried to steer me away from the track I was going down to prove to me that I did not know squat.
I know that there have got to be nicer guys out there and I plan on persuing them sooner rather than later. Unfortunately right now is a really bad time and I have to put off the lawyer trips for now. in the meantime I am using this time to educate myself - but I can promise you the next time I go into one of these offices I will most likely play stupid.