Why is my $120 utility bill not a mandatory creditor, but my $25 BO America card IS?

[kawh]

I have not filed yet, but will have to very soon. Have managed to keep current on expenses that include utilities and two or three cards used only for bare necessities. There is no telling when all this will finally get filed, as my legal help does not help or advise me of anything, so I have been extra careful to pay off these small (under $50 a month) amounts even before they come out on a statement, so I will be sure not to be in a position to have to add any of them to the filing.

There is a question here though. Why is it such a big deal to have a $25 tankful of gas charged on a card? And it's a Big Deal cause if I don't scramble to pay it off before filing date, it's illegal, I'm committing perjury, in danger of going to jail, not getting a discharge, and so forth. This is all stuff I've read online, about how you aren't supposed to try to keep any of your nonzero balances out of the bk or they will execute you on the spot.

It doesn't matter if you absolutely are going to pay for the tank of gas in a couple of weeks. (Ok, I might get hit by a truck and not pay it, but then I don't need to worry.) If that card has more than zero balance on the date you file, and it's not on the list, all these consequences could land on your head. It doesn't seem to matter that this month you are more concerned about your electric bill, due in several days. Since the bill is larger than usual, it would help to be able to let the tankful of gas sit on the card for another couple of weeks until your income comes in.

But I won't, because of all the hype about it. If anything has to be delayed a little, it will be the electric bill.

Why are credit cards so special that each one has to be listed if it's not zero balance? And is that true, or just a widely circulated myth? All attorneys don't agree on it. It would be no use to ask mine, trust me.

A $40 payment to a card for groceries or eyedrops can't possibly be in the category of a preference. Did the utility companies get a special write-in for the new bk law, that people aren't required to list them?

I realize I am asking for a lecture on how I will have to get a little better at budgeting to pay cash for everything, but in the meantime, while I'm getting better, the cards still extending credit have been helpful and sometimes have kept me away from dangerous ATMs at night.

I just don't get why it has to be this way, I like a little wiggle room.

[MSbklawyer]

Credit cards are debts. Electric / utility bills are expenses if they're ongoing. You do list utilities on schedule "J" - as an expense. But not as a debt. That's the difference.

[justbroke]

Just as MSbklawyr writes... it's an expense versus a debt. I don't know why you write that "all" attorneys don't agree. Debt is pretty well understood. I would add, that if you are in debt with the electric company -- are past due or otherwise in arrears -- then you can list that debt on Schedule F as an unsecured debt. Moreover, if you have a deposit on file, you also need to list that as an Asset on Schedule B and may need to exempt it on Schedule C.

Utility companies do have a special portion of the code, and that's found in 11 USC 366. That part of the code was really to protect the debtor from having their electricity shut off because they filed... even if they owed the utility money. It also dictates how and what the utility can do post petition, including what they can do with any deposit on hand.

A preference occurs where you pay one creditor over another. However, a preference is not created until you spend $600 on a single creditor (in aggregate) in the 90 days preceding your filing. This really doesn't affect you personally, so I never understand why people worry about preferences. (Okay, if the preference was to a family member or friend, then it could make that relationship touchy.) A preference just allows the Trustee to take the money back from that creditor, whom you paid, and redistribute the money to the unsecured creditors filing claims.

I think part of the problem is that you may be reading too many on-line websites that do not have a collection of serious individuals who actually understand and, in some cases, actually practice bankruptcy law. You are not going to jail and committing perjury by spending before filing! Especially if it's for household needs and purposes. It is only a presumption of non-dischargeability if you spend more than $500 in the 90-days preceding or you bought luxury goods over $750 in the 70-days preceding filing. (11 USC 523) That's to prevent people who "charge up" their cards on purpose; it is not intended to punish those trying to live by purchasing gas, food, medical services and other items necessary for living. It makes these things non-dischargeable... meaning you still have to pay them.

[LadyInTheRed]

Hmmm, the internet just ate my long post about what is and isn't perjury and faud and other things already covered by MSbklawyer and JustBroke. So, I won't repeat it all. But, I just can't resist the lecture: The best way to get better at living without credit cards is to tear them up! If you can't make ends meet without credit, stop paying your unsecured debt, which you shouldn't be doing anyway if you will definitely file BK. Plan ahead and go to the ATM during the day or find safer ATMs.

[kawh]

Thanks for the responses, msbk and justbroke, of course the main difference is the expense vs debt category. I'm not behind in utility bills and I do understand what a preference is. I had just wondered if it was such a big deal to have a small amount you weren't going to list. I wrote that all attys don't agree because I read a few answers online from attys who don't seem to think it is such a serious thing to leave off a small balance card, it just means that debt won't get discharged. That makes sense to me.

[justbroke]

Actually, if you leave off a debt it does get discharged in most districts, so long as you are a no asset case. There is pretty much a lot of caselaw on this. You should NEVER leave off any creditor where you have a debt. Besides, not including a credit card doesn't meant hat account won't be closed. In fact, most of the credit card companies subscribe to a service that gives them bankruptcy notices within 24-48 hours of filing! Most accounts would be closed regardless of you listing them.