70/90 "rule" nondischargability of c/c debt

[Goldfish]

[HHM]

Procedurally, the credit card company would need to object.

The amount is actually higher, but I don't have the updated amounts handy, but is something like $1000 on charges, and $750 for cash advances.

Your priorities are out of sync. Wasting money paying your CC's to get what will only amount to at most, a 10 point difference on your credit report is wasteful. Also, Do NOT get a secured card PRIOR to filing, it will simply be closed after you file. Don't worry, you will be able to get CC's within 2-5 months of filing bankruptcy.

Focus on what is important, get out of debt to stabilize your financial life, the rest takes care of itself. Just stop paying your credit cards and get your bankruptcy moving.

[justbroke]

** How procedurally does the rule about the $500 in 90 days get applied, if it does?

It's not automatic. It is only "presumed" with the burden of proof on the Debtor. However, the Creditor must file a complaint (adversary proceeding/AP) asking to the Court to determine that the debt is non-dischargeable.

[I also heard one can use form 707 to explain airfare charges within the last 90 days as due to family necessity.]

I've never heard of this Form 707.

Will the particular creditor always object if the aggregate is over $500 in the previous 90 days?

This is a per Creditor decision. Advesary Proceedings (APs) are expensive to litigate and can easily cost upwards of $4,000 to prosecute. In these cases, most Creditors won't prosecute small amounts unless they are absolutely sure they have a rock solid case, because losing for them would mean losing more money.

** And is it really $500 ? [I’ve heard different numbers cited with regard to the cash advance limit.] Is this only a rule of thumb or do the limits get officially revised each year?

Don't "listen" to what people say. Read the Statute for yourself (11 USC 523). These rules are subject to the various adjustments in 11 USC 104. They are currently $550 and $825 respectively.

** Is the rule applied strictly for 90 days from the date of last transaction (charge), or applied more loosely?

Transaction. The language used in the Statute (11 USC 523) reads "incurred" which means when it happened. So that means when the transaction was entered. The law is not as "fluid" as people think it is. In most cases, it is cut and dry.

Please realize that those 70/90 day rules don't apply to fraud and to insolvency. If you ran up charges, knowing you were filing, then the Creditor can easily still file a complaint. Creditors will also file well beyond that 70/90 days when you show an intention not to pay or that you provided false information that they relied upon in order to extend credit. I advise you to be cautious.

Even buying a big screen TV 180 days before, and never making a payment on it, can lead to an AP for non-dischargeability. This is specially why I can't (won't) provide anymore detail on how to avoid a complaint being filed. The 70/90 day rule is basically a safe-harbor for creditors because it is quite evident that 90 days before filing, a debtor is insolvent and knows that he is insolvent. For anyone to operate outside that time period and charging up their cards knowing that they are not going to pay, can't pay, and/or are filing bankruptcy, is fraud. Whether a Creditor can prove fraud or not, is irrelevant to me... although it would be necessary for proof in an adversay proceeding.

I hope that helps.

[kornellred]

The secured credit card before filing is wishful thinking. Like the moderator said - it will be canceled by the trustee and the funds used to secure it confiscated. And why the heck would you even care about your credit rating? In bankruptcy, you have no credit.

[tigergem]

I had a $300 secured card for about a year before filing. I think I did it right. I paid the balance every month. They sent me a really pretty "Letter of Credit" when they closed the account -- which they did immediately upon BNC notification of my filing. It never even got to the Trustee. Of course they used the security balance to pay off the card and sent me a little refund check. On one of the schedules, you have to report payments in the past 90 days to any creditors. I listed that card. The Trustee mentioned it and I was able to truthfully state that the account was closed.

I am HOPING that the positive credit entry stays reported on my credit reports since they weren't listed as a creditor in my Schedule F. (Because of the security account.) I am also hoping that after I have paid into my plan successfully for a year or so that my trustee will let me have another little secured credit card, but we'll see. I'm not that worried about my FICO score - - other than as a curiosity. I only really need a little credit card in case my truck breaks down to rent a car. I might want to buy a house again some day after all of this blows over, but that is too far down the road to think about right now.

[Goldfish]

Is the 70/90 strict or not? What I heard today

Hi guys,

I met a lawyer today. [Though I am going to probably file pro se. I'm scheduled for a pro bono type workshop for filling out forms this week.]

Regarding the 70/90 rule (with $550 on luxuries...) he said he really did not know the specific code/law; he would have to look it up.

[NOTE: I'll be filing in LA,CA.]

He said that what he is guided by is charging over $3K in the past 8 months with any particular creditor. He said otherwise it's not worth their while.

[Note: in keeping with what I read on another thread, he said Chase is very aggressive. ]

Another BK lawyer had told me something similar; he said each creditor would not pursue anything under $2K for the past X? months (need to refer to my notes); but being conservative, he'd like even less.

This lawyer I met with today who reviewed my recent charges told me my charges were "nominal". [Even though maybe outside the "code". He was not worried but this stuff. He did not study it.]

Seems in keeping with what you were saying JB.

Thank you all so much for this forum. I'll leave my comment at this right now. [Thanks for all the Matrix input. I'll review it. ]
gf