Fraud - 90 day window

[newlife13]

Before I realized that there was no way I was going to be able to remain current on my 4 credit cards (on which I had never missed a payment; I was already months behind on the other 3) *and* pay the debt settlement company their high monthly payment held in escrow, I charged my kids' Christmas gifts on my Chase Visa. About $1200 between mid-November and Christmas. I am current on that card and still making minimum payments, but the writing on the wall was telling me that filing for Bankruptcy was the only way out.

My attorney said it's a pretty clear case of fraud, but proving "intent" not to pay would be hard to make, since I'm still making payments. "Inability" is also tenuous, as I am able to make the $45 minimum payment on that card. But, he said it's still fraud, but there is no way that Chase will sue me unless they have in-house counsel here in my state because they'll have to pay an attorney more than $1200 to collect that debt.

I suggested waiting to file until Feb or March, during which time I keep paying the minimum, and my attorney said to forget it. It'll make no difference at only $1500 total card spend. I may have ignored him and made a January payment. ;-)

But I'm tentatively filing 1/25. Does anyone see any merit in waiting until 2/25? My attorney said we can wait, if I want to save money, but NOT to pay my cards because it's a waste of money. What say you?

[justbroke]

It is what it is at this point. When you spend on credit and you "know" that you are insolvent, without the ability to pay, it could be construed as fraud. Now, as to whether the creditor is willing to prove that you had no intent to pay is an entirely different story. From what I know, at least in my district, most large creditors would not deal with anything less than $2,000 in a non-dischargeability complaint because it can cost them $4,000 or more if it goes to hearing. It's just not worth it to file a complaint, at least here.

Having wrote that, if it was say your ex-spouse or a litigious ex-business partner...

So I can only say that the advice of your counsel, who knows "your" district, is probably the best.

[newlife13]

He said all of the charges seemed like necessities -- groceries, gas, Xmas gifts, food. I'm thinking dining out at restaurants, yoga pants, expensive Nike sneakers, a NorthFace jacket all don't sound like necessities to me! But, you're right, he knows his business and his trustee and the creditors better than I do. No luxury items, though, and no cash advances.

Frankly, if I am able to hold onto my 2016 tax return, I can pay the $1500 outright, if it's not included in the Chap 13 due to a complaint. I'd just like a nice clean Chap 13 with no separate debts. One payment per month to the trustee and done.

[justbroke]

They don't read like "luxury" purchases. Luxury would be something unnecessary (jewelry, boats, jetskis, etc.). Don't prepay any creditor at this point, since it's a waste of money and completely pointless at this time. Follow the advice of your attorney. Chapter 13s are much different than a Chapter 7.

[newlife13]

They don't read like "luxury" purchases. Luxury would be something unnecessary (jewelry, boats, jetskis, etc.). Don't prepay any creditor at this point, since it's a waste of money and completely pointless at this time. Follow the advice of your attorney. Chapter 13s are much different than a Chapter 7.

Yes, he said I'm throwing money away by paying anyone.

It just feels so wrong, you know?

[justbroke]

Please remember that bankruptcy is a business decision. It's a financial tool. Just about every creditor bakes into their rates a certain percentage of losses. Besides, another $1,500 is really nothing to the creditors and is just a waste of money since you're entering into a Chapter 13 plan of reorganization. In a Chapter 13, at least you attempt to pay back some dividend to those creditors based on your ability to pay (if that makes you feel better).