Using credit cards to pay bills

[flower]

Spartan, what a relief. What state do you live in? I'm in Indiana. I'll see what our state's attorney general office says. Thanks so much!

[Spartan]

Not to worry. If your house is exempted, then it is exempted. You will always have your house then. Those unsecured debts that cannot be discharged, will just sit there waiting for the day you have money to repay them. If you don't have the money, then they are simply out of luck. That is the cost of doing business. Don't worry, they will or have gotten, it back from other customers. Unless they file suit and get a judgement against you, the debts will simply run out of their statute of limitation in 6 yrs (or even shorter, depending on your state) If they get a judgement, then it will take 10 years for the judgement to expire. They can renew it for another 10 years. But it will all be for naught. They can't collect what you don't have. They have just wasted the court fee and attorney fee. lol

If the only asset you have is exempted, and you are not making enough money for them to garnish your wages, then you are basically judgement proof. You can tell the creditors to get lost. You don't even have to file bankruptcy. That is what the State's Attorney General's office advice. Save your money. Don't need to file bankruptcy. It says so in the booklet from the Attorney General's office. I have it here in front of me. It does say there are ways your can get your lawyer to tell the creditors to shove it.

I would advice you to open a bottle of champaign and forget your worry. It isn't your worry. It is the creditors' worry. lol They can't collect from you. You are free. You are judgement proof. Nothing can be done to you or about you.

[flower]

So given that I can't pay off $30,000 with a $4,000 income, then how would my bankruptcy be handled? I think I would meet all of the excemption for the house, etc. If they think I committed fraud by paying my bills with the cards, then would they still try to take my house if it meets the exemption requirement? Could they do that legally?

Why would my credit card companies keep offering me credit card checks to do with them as I wish, when they surely know I have a very, very poor credit rating? How could they turn around and blame me? Wouldn't they be responsible for making the offer? I'm just trying to heal my illness. What a nightmare!

[Spartan]

Not to worry. This is not the kind of fraud that brings criminal charges. Fraud in this case, only means you cannnot seek relief using bankruptcy. You wouldn't be charged if you can't pay your bills. Those days are long gone.

[flower]

What do they consider not relevant? I'm paying for my doctor visits, prescriptions, vitamins which keep me from being bedridden (though I have only been able to work at most 3 days per week), utility bills, food, etc. My significant other is helping me quite a bit, but it has been very hard.

Disability is next to impossible to get if you are working at all (you get three tries at it and then you are finished, you cannot file anymore. The first time you try 75% of people are turned down, the second time you try the percentage of people who are turned down is higher, the third time requires an attorney and you have a 50% shot at it then. And all the attorneys tell me not to work). The whole process takes about three years. But the disability office expects you to have frequent doctor's visits, and medical tests taken etc. and I have no insurance. They want you to be taking your medicine to prove that you are trying to get well. What am I supposed to do? No wonder people become homeless.

So I have an income of around $4,000 and a debt of around $30,000. I have been sick since 2001. I'm steadily improving, but it has been slow. Some of the expenses went for covering health insurance premiums, but quit that because it became ungodly high.

I believe I will meet the house exemption okay, but if they think I have been fraudulent by trying to get well, how in the world would they expect me to pay any of this back. Obviously I can't. Since I have no money, would they seek criminal charges?

Oh God. I'm so scared. And stress is the worst thing for this illness.

[HHM]

There are two types of fraud, so-to-speak.

There is "presumed" fraud, which are charges made for non-necessities in excess of $600 (cummulative) made within 90 days prior to fling BK.

Then there is "regular" fraud, which is any transaction outside the 90 day period where the creditor has the burden to prove that you made the charge without a reasonable expectation of being able to pay it back.

However, given the expense involved for a creditor to file an objection to discharge of their debt, outside the 90 day presumption period, the balance usually needs to be in excess of $2,000.

[flower]

CSCHON 911, did you file before the 90 day window was up or afterward? I was under the impression that if you wait to file after 90 days of not using your cards then the credit card companies cannot accuse you of fraud. Am I understanding this correctly? My illness causes brain fog, so sometimes my comprehension isn't the best. With my income, there is NO WAY I could begin to pay back any credit card if they thought the usage was fradualent. How would that situation be handled then? Thanks to anyone that can answer this.

[ChainSmokin]

Why? Your signature indicates you already filed.

Hi tradewiz50,

I did a quick file (just the Creditor Matrix, and pre-counseling) it officially got the clock ticking, but I still have a little time to do some tweaking with my other schedules etc. I am also curious as what to expect from these older debts as I go through the process. I should have been more clear, thanks for the reply!

[tradewiz50]

Why? Your signature indicates you already filed.

[cschon911]

We used our credit cards for basic living expenses

Including Gas for cars, Food, and Perscriptions. Unfortunately, we did
have to pay back one of the credit cards in full. We filed Bankruptcy
last Oct. The lawyers representing credit card companies or the credit
card companies themselves DO NOT care what you charged. If they
are recent charges, they can say you committed fraud. Knowing that you
could not repay the debt but using the credit card anyway.

[ChainSmokin]

Thanks Spartan!

As you may have seen in my other post I’m quite concerned about missing a creditor, this eases my mind a bit.

[SinkingFast]

I'm sure that I am going to be harrassed if I stop paying my credit cards.
Will my attorney, when I file tell the creditors to stop harrassing me?

There's a 70/90 Day Rule. 70 Days on Cash Advances and Convenience Checks use. 90 Days on CC charges. If you file within that time frame, the burden of proof that the charges were not fraudulent falls on you. Outside that time frame, the burden of proof shifts to your Creditors.

And, as Spartan said, there's a Preferential Payments rule too. If you pay any Creditor $600 or more within 90 days of filing, the Trustee can go back to those Creditors and get those monies back for the benefit of all your Creditors. That's Unsecureds payments. Not payments for Secureds or Priority payments. Like your house payment, car payment, or payments for back taxes.

Generally speaking, you're Creditors won't call you until you've missed a couple of payments, maybe 3. When they start calling, use Caller ID or an answering machine to screen your calls. Answer when it's family and friends. Don't answer when it's a number you don't recognize.

Once you file BK, you come under the protection of an Automatic Stay. Your Creditors will immediately stop calling you. If Creditors do call, they are violating the Automatic Stay. That's breaking Federal Law.

[Spartan]

Since you have filed, then the debt will be discharged, lawsuit dismissed, and judgement vacated. IF there is a pre BK judgement, it will need to be vacated at the local court.

SOL is no longer of relevance, once you file.

All unsecured debts are discharged in the BK, whether you list it or not. So, you don't have to worry about unsecured debt that pops back up from no where. They are considered discharged in the BK.

[Spartan]

1. I am quite sure that if the amount is greater $600, then you will have problem with preferential treatment, IF you file for BK within the 70-90 days window.

2. Yes, once you file, all collection effort will have to cease. No more harassment.

3. SinkingFast has solid advice.

[flower]

I'm sure that I am going to be harrassed if I stop paying my credit cards.
Will my attorney, when I file tell the creditors to stop harrassing me?