Any advice on credit card payments appreciated

[frankies_mom]

I'm new here and could use some advice. I have been reading posts for about a month now and have been waiting to register.

I hired an attorney 2 weeks ago and am making payments, getting the paperwork in order etc. All my debt is CC - I am filing alone since the cards are not in my husbands name. We are current on the house and want to keep it. No car payments. A little on how I got into this debt mess... had an unplanned c-section, then some complications, then back to work reduced hours. Carried manageable balances beforehand on the CC but then started using the CC for living expenses and then to pay each other. So stupid I now realize. We thought the most important thing was to be current on the CC.

Anyway I started back to work FT mid-January and thought we could now play catchup. Well I have a Chase and Bank of America and the payments are through the roof - 450 and 398. Beginning of January I said we have to do something to stop charging and start paying. We had been current on everything and still are current but this month we will slip on a couple with the huge payments. So I called CCCS thinking that they could help and I could get on a plan to pay back. Well after going through everything they said we are at a deficit to go on their plan and recommended bankruptcy. I then called all my credit cards to try to work something out directly with them... Discover was actually very nice and put me on a 6 month plan but Bank of America recommended credit counseling and would not do anything else for me (I have been a good customer for 10 years - never late!), and Chase said I would have to be very behind in order to go on their plan. They don't make it very easy for people to try and pay back in good faith.

Bottom line is I will be filing a Chapter 7 - even with my FT income now and my husband's we are still below the median income for our state by $4000. And we did the means test too just to make sure and we came out something like -100. Has anyone had difficulty with trying to filing chapter 7 being just below the median? Do they give you any trouble? I have 4 cards... one I have not used since December and three I have not used since early January. I did take out a Cash Advance on Bank of America for 1800 in November and on Chase for 2000 in December. As far as CC payments on Chase and Bank of America should I try to send the whole minimum since I did take out these cash advances (I really just don't see how but I can try), or maybe half or just what I can? Does it really make a difference as long as you send something in? I don't know if it helps that I have had these cards for years and have always paid on time.

Thanks in advance for any advice you can give on the CC payments and median income and anything else. Glad I found this place. I don't feel so alone.

[SinkingFast]

Welcome to the Forum!!

Here's the short version,..............

Stop using all CC's if you have decided you will file BK. If you can't pay the payments, then don't. Generally speaking, you'll have a minimum of 6 months lates before anything will happen.

That gives you time to Consult around with attnys, find one you're comfortable working with, get your attny's and filing fees paid, and wait. You'll be all prepared in case something happens and you have to move quickly.

Time is gonna be your best friend. The longer you can wait, the better.

The hardest part is gonna be the phone calls that will eventually come. Just use Caller ID or an answering machine to screen your calls. Don't talk to any Creditors if you don't have to.

[SamanthaJones]

You don't have to justify filing bankruptcy.

As far as the credit cards- one of the moderators in here can explain exactly why they don't want to deal with you unless you are very delinquent- there's a rational reason for it actually. As far as the median income- practice the means test with your projected income, and also practice the schedules I and J on the bankruptcy petitions- that way you will see how the court would look at your ability to repay.

[frankies_mom]

Thanks for the advice, I appreciate it. I guess I just feel very guilty not sending in anything or at least the minimum. Is sending something better than nothing? Even if you can't make the minimum? Do they look at it like at least you tried or they don't really care?

As a rule of thumb, do the courts usually go by median income and as long as you are under it, whether it is a lot or a little, you can go Chapter 7? Thanks again.

[demismom]

From what I've been told, if you know you're going to file Chapter 7, quit paying your unsecured debt, you're just throwing away money. I know, that stinks, doesn't it? I HATED stopping paying, but once you have a little breathing room, you'll have a taste of what life may soon be like!

As for the Median test, we are personally worried. It would appear we may have disposable income even though we fall below our state's median by nearly $8000. I don't think it's a given that just because you're below the median you get to file Chapter 7, but I could be wrong, at least I hope I am.

[lrprn]

Is sending something better than nothing? Even if you can't make the minimum? Do they look at it like at least you tried or they don't really care?

The credit card companies couldn't care less if you've been a faithful on-time paying customer for over 30 years like we were - they just want their money now. This is a cold, emotionless business deal to them - nothing more, nothing less. It takes time to begin to see filing bankruptcy the same way on our debtor side of the fence - it's a business decision we have been forced to make, nothing more, nothing less.

As SF and Demismom have said, when you are certain you are going to file, paying anything towards your unsecured debts is just throwing your money away. Use that money that was going to your credit cards to pay your lawyer and catch up on necessities you and your family have been doing without - medical care, dental care, car repairs, home repairs, etc - before you file.

As a rule of thumb, do the courts usually go by median income and as long as you are under it, whether it is a lot or a little, you can go Chapter 7?

If your husband's and your gross income combined for the last six months is below your state's median and you've lived in your state at least two years, then you should be fine to file Ch 7. In this case your lawyer will stop filling in the Means Test after the first section. When different bk district customs and different trustees are involved I try never to say never , but this is as near 100% as the law can make it.

Discuss your concerns with your lawyer and try not to let worry overwhelm you. Hang in there, and come back with questions or to share more concerns any time!

[GoingUnderInNV]

I guess I just feel very guilty not sending in anything or at least the minimum.

Ya know, I hate to sound bitter, but I used to feel the same way. I quickly overcame that feeling when I learned about the preditory practices of most CC companies when it came to average Joe consumer. The one that sent me over the edge is that Credit Card Company A can change your rate from 8.9% to 23.9% because of something that happened, innocent or not, with Credit Card Company B. They're all scoundrels (to be nice), and don't DESERVE your trust. They all do it. Stop paying 'em, save the cash for your BK attorney, and move on. Don't waste the energy thinking about it. I had STELLAR payment record with Citi (always paid considerably more than the minimum, and often paid off the balance every couple months), and STILL they kicked my rate to 24%. Well, screw 'em. If I wanted to get my (metaphorical) knees broken every month, I'd just find a loan shark (which I now think ALL CC companies are).

Stop paying 'em, and let your senators and representatives in Congress know exactly what you think about the shameful pandering that was the new law in '05. I have, and while I don't think it accomplished much, I had a responsibility to do so.