Chapter 7

[pitner]

New here just saw an attorney on 4/4. We are completely broke. All we have are some credit cards with some balances left and we are up to date on all of them. The attorney said "you cant use your cards at all from here on" how does the TT know when we saw an attorney and what happens if we use the cards for necessities (food clothing muffler on the car) before we file he is talking June July for filing.

[ace300s]

Did you ask the attorney you met with that question? Also, if you are filing in June or July why not just stop making all credit card payments. That would give you extra money? Good luck and keep us posted.......

[NoMoreCards]

When you file, you will need to provide credit card statements. I highly recommend taking your attorneys advice.

[Pjmax]

When you file, you will need to provide credit card statements. I highly recommend taking your attorneys advice.

Not necessarily. Many, including myself, did not provide CC stmts. However, if you are planning on BK soon, stop using the cards. By continuing to use the cards, it may appear that you are abusing the process. The TT may just ask you when you last used your cards, mine did.

[LadyInTheRed]

Welcome to BKforum, pitner!

The risk of using credit cards within 90 days of filing BK is that the creditor may file a petition to have the debt declared non-dischargeable because you incurred debt with no intention of paying it. If the purchases are over $500 and for luxury goods or services, the presumption is that they are non dischargeable, but the creditor still has to file a petition. If the purchases do not fall under that category, the creditor has to prove you made the charges without an intent to pay.

While a creditor is unlikely to file a non-dischargeability petition on small amounts of debt, why risk it? Besides, if you can't live without using credit cards, BK will not help you. Hopefully, the attorney also told you to stop paying on your unsecured dischargeable debt so you can use the money for your living expenses. If you still need credit when you aren't making those payments, you may want to delay filing until you can either decrease spending or increase income. Once you file BK, you won't have credit cards to rely on.

[ohiogal]

Some trustees will argue for fraud if you use the credit cards too close to your filing date. In other words, you might be accused of using the card *knowing* you wouldn't be paying for whatever you're buying. The best way to avoid that is to stop using the cards, stop making the payments, and instead use the cash to pay for the things you would otherwise get with credit.

I was told by my attorney not to use my cards for at least three months before I filed, and to stop paying on my credit cards, since I was just going to get the debt discharged anyway. She called it "pouring money down a rathole", and she was right.

[bcohen]

So, to avoid problems, why not fix your car, buy the clothing you need, take care of whatever deferred medical/dental work you needed to have done, and then quit paying the credit cards, wait 6 months, and THEN file? It is extremely unlikely that they will sue before charge-off anyways.

[ace300s]

So, to avoid problems, why not fix your car, buy the clothing you need, take care of whatever deferred medical/dental work you needed to have done, and then quit paying the credit cards, wait 6 months, and THEN file? It is extremely unlikely that they will sue before charge-off anyways.

I guess that is one option to take. You'll get flooded with phone calls from your creditors until you file BK. Probably nothing other than that will happen.

You're credit report will show a lot of 30,60,90,120 lates, charge offs, etc, prior to filing BK. I've read that hurts your credit scores more coming out of BK. Not sure if that true....

In my case I was current on all my credit prior to BK7. 10 months after BK7 my fico is 653 and my fako credit karma score is 695. Again not sure if that helped my credit scores after BK7 or not. Maybe some of the experts and address that?

BTW, most of us could care less about credit after going through BK, but just bringing it to your attention if you care...

Good luck..

[Pjmax]

TU and Equifax generally don't show payment history on BK'd accounts, Experian does, so lates pre-BK will have an effect to a certain degree. Ironically, the lates hurting my scores are from an auto account, paid off about 10 mos. before I filed, and not part of my BK. For 6 yrs. I was never late. The last 6, I had a hard time keeping up.

[bookworm]

TU and Equifax generally don't show payment history on BK'd accounts, Experian does, so lates pre-BK will have an effect to a certain degree.

That explains why my Experian score is so much lower than the other two. None of them are too bad, though, considering it's been a year since I've BKed, and I haven't done anything to try to up my score yet.

[TRfromillino]

I met with my lawyer last May when I finally realized I'd gone too far. He advised me to stop using/paying on them at that time. I did and I endured all the months forward until I had saved enough cash to pay him with. Since that was just in February, things went on for quite some time. Fortunately? I just have my cell phone so it was on 'silent' for all that time and I just was able to turn it back on after I filed. It's pretty easy to ignore phone calls on a cell. I also noticed a big drop off of calls once they went to charge-off. Didn't really want that to happen, but I didn't have much choice. Credit score? Who cares at that point? You just have to do what you need to do and work on the rest later.

All that being said, I agree with the statement, that you would have more cash available if the cc payments aren't there. And are there other issues that is causing attorney to delay filing for so long?

[bcohen]

[Your] credit report will show a lot of 30,60,90,120 lates, charge offs, etc, prior to filing BK. I've read that hurts your credit scores more coming out of BK. Not sure if that true....

Most people file for bankruptcy as a result of being sued, having something repossessed, etc. Very few people file for bankruptcy "out of the blue" while continuing to pay everything current, and those who do are mostly non-consumer debtors filing to shed (or restructure) debt related to a business, such as rental property debt.

After bankruptcy, your credit is based on what you do going forward. If you default on debts again, then of course your credit will suck. However, if you handle your finances responsibly after bankruptcy, you can certainly have good credit again, regardless of any collections/charge-offs/judgments which might have occurred before you filed.