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The Likelihood of Adversary Proceedings

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    The Likelihood of Adversary Proceedings

    It's been several weeks since we first considered Chapter 7, and we haven't used the credit cards since. But, prior to that, we were robbing Peter to pay Paul. Unfortunately, our budget doesn't allow us to make the minimum payment AND meet our other financial obligations, so in order to stop using the card, we have to stop paying on it. We have enough money to make about two more payments without using the card, but that's about it. After that, we'll have to cut them loose, and prepare for the onslaught of creditor harassment. It will be a few months until we can actually afford to file.

    Looking through the past four months of statements, I see things like the grocery store, the gas station, utilities, cell phone bill. Mostly things we need.

    The charges that concern me are $450 on a new set of tires (including balance, rotation, alignment), and $350 to make my car stop leaking oil--these happened in April, and I have the receipts. There are also quite a few charges to Target, where we buy diapers (about twice a month@thirty dollars each time, and, unfortunately, since I wasn't planning on BK at the time, I didn't save any of these receipts).

    So, based on the above information, how likely am I to face adversary proceedings? From what I've read on these forums, most AP's involve cash advances (which I've made none), or ridiculously high charges (like, in the thousands), so I think I'll be okay (I hope). Plus, since I'm making two more payments without using the card, ninety days will have passed between my last purchase, and the first missed payment.

    Any thoughts?

    I'm just praying that things go as smoothly as possible. This whole bankruptcy thing is overwhelming, let alone the possibility of creditor objections.
    Last edited by lotsahats; 08-26-2011, 10:16 PM.
    Filed Chapter 7: March 19, 2012
    Discharged! June 28, 2012
    Closed! August 8, 2012

    #2
    Anything could happen of course, but the likelihood is very rare. Usually the look back is above $600 in a lump sum. What is the total you owe per card? An AP would only be justified by fraud or some malicious reason. Fraud would be if you knowingly where going to profit by a cash sum and not intending to pay back. Time is your friend here, so put as much between last use and filing. Yes be prepared to accept calls. After about three months they will sell your debt to a collector and the calls go on until you file. 'Hub
    If I knew it all, would I be here?? Hang in there = Retained attorney 8-06, Filed 12-28-07, Discharge 8-13-08, Finally CLOSED 11-3-09, 3-31-10 AP Dismissed, Informed by incompetent lawyer of CLOSED status, October 14, 2010.

    Comment


      #3
      Originally posted by lotsahats View Post
      based on the above information, how likely am I to face adversary proceedings?
      IMO, not very likely. You're living, not defrauding. Just continue to NOT use the cards.
      All information contained in this post is for informational and amusement purposes only.
      Bankruptcy is a process, not an event.......

      Comment


        #4
        On one card, I owe 11K. On another card, I owe 3K. The last payment on each of them will be in September, which means that the accounts will be active until about mid-October. I won't be able to pay anything then. I won't be able to actually file BK until January or February.
        Filed Chapter 7: March 19, 2012
        Discharged! June 28, 2012
        Closed! August 8, 2012

        Comment


          #5
          I agree with other the other posters so hopefully the chorus will put your mind at ease. The risk is very low. The risk isn't zero because creditors can do oddball things for idiosyncratic reasons.

          Go look at the subforum for APs on this board. Do you see how few posts there are; how infrequently it comes up? That too is evidence that APs are rare.
          Filed Chapter 7 non-consumer as a pro se. *Discharged* October 2011.

          Comment


            #6
            You have nothing to worry about with respect to your use of credit cards up to this point, lotsahats. A good bk attorney will ensure that you have not used a credit card for 90 days prior to filing the petition. The reason for this is (among other things) that no abusive intent on the part of the debtor can be inferred after a reasonable period of time has elapsed. It is a hard thing to admit, but planning for bankruptcy often results in the need to use available credit for necessities such as auto maintenance, even after it has been decided that bankruptcy is inevitable. Everyone is keenly aware of the situation - no one is being fooled.

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              #7
              I wouldn't bother making any more payments. You are throwing good money after bad. Save your money for your attorney. You have plenty of time.

              Comment


                #8
                Originally posted by AngelinaCatHub View Post
                Anything could happen of course, but the likelihood is very rare. Usually the look back is above $600 in a lump sum. What is the total you owe per card? An AP would only be justified by fraud or some malicious reason. Fraud would be if you knowingly where going to profit by a cash sum and not intending to pay back. Time is your friend here, so put as much between last use and filing. Yes be prepared to accept calls. After about three months they will sell your debt to a collector and the calls go on until you file. 'Hub
                So then, what matters most is the time between the last purchase and the filing date, rather than the last purchase and the first missed payment, correct? Even if there are several months between the time the payments stop, and the time I file? Because the only reason I'm even bothering to scrape up two more payments that I really can't afford is to try to protect myself. Call me paranoid, but I WOULD be among the 0.002% who they decide to give a hard time for no apparent reason. That's just the kind of luck I have. I'm going to end up with an ulcer.
                Filed Chapter 7: March 19, 2012
                Discharged! June 28, 2012
                Closed! August 8, 2012

                Comment


                  #9
                  Originally posted by IHateChase View Post
                  I wouldn't bother making any more payments. You are throwing good money after bad. Save your money for your attorney. You have plenty of time.
                  I agree. Don't make any more payments. The presumption of fraud only arises if you charge $600 or more to the same creditor for the purchase of luxury goods and services within 90 days of filing. As ttg1 points out, there is never any guaranty. But a creditor is less likely to file an AP if they have to prove the charges are fraudulent rather than relying on a presumption. The amount at issue has to be enough to make tit worth the risk they will lose and eat their attorney fees. It doesn't sound like your recent charges are enough to make it worth it.
                  LadyInTheRed is in the black!
                  Filed Chap 13 April 2010. Discharged May 2015.
                  $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

                  Comment


                    #10
                    Originally posted by IHateChase View Post
                    I wouldn't bother making any more payments. You are throwing good money after bad. Save your money for your attorney. You have plenty of time.
                    I agree. Don't make any more payments.
                    Well, it's a moot point, now. I just looked at my the latest statement, and, for some reason, the minimum went waaaayyyyy up--by almost forty dollars! And, I haven't used this card in six weeks, I would have expected the minimum to at least stay the same, if not drop a dollar or two.

                    They're not getting another penny from me. I could barely afford it before!
                    Filed Chapter 7: March 19, 2012
                    Discharged! June 28, 2012
                    Closed! August 8, 2012

                    Comment


                      #11
                      Originally posted by lotsahats View Post
                      Well, it's a moot point, now. I just looked at my the latest statement, and, for some reason, the minimum went waaaayyyyy up--by almost forty dollars! And, I haven't used this card in six weeks, I would have expected the minimum to at least stay the same, if not drop a dollar or two.

                      They're not getting another penny from me. I could barely afford it before!
                      Make sure to print off or save any statement copies you will need for your records before they lock you out of online access.
                      ~~ Filed Over Median Income Chapter 7: 12/17/2010 ~~ 341 Held: 1/12/2011 ~~ Discharged: 03/16/2011 ~~
                      Not an attorney - just an opinionated woman.

                      Comment

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