How long do I have???

[HelpMeFast!]

I've made the decision to file and have stopped using my credit cards completely. I've only been using one card to purchase everything because I haven't had any cash. I've also completely stopped paying my cards. Here's my situation and my questions:

Married, wife doesn't work(stays home with our two children), $55k salary, $150k mortgage (no equity), $78k in cc debt, one car loan of $18k (no equity). We live in Texas.

1. I've already received my next statement that shows the past due amount and late charges. A $144 minimum last month turned into over $500 with interest, late charges, and fees. I have some cards with VERY LARGE minimums ($650/month). Will the cc companies treat these larger amounts with quicker actions or will they leave me alone for a few months as well?

2. Is this a good plan? Right now I have come to the end of our rope. All plans, plots, schemes and dreams are out the window. We can BARELY make ends meet even if we don't pay any of our cards. Is this safe or can they try and sue me? There's nothing to get if they due.

3. At what stage do I get worried about collections? I haven't settled on a lawyer yet.

4. I've been using one card like crazy. Will it be ok since I stopped using and paying the card at the same time and just try to wait it out for a few months?

5. It's so tight that my wife would like to get a job and help but it would put us over the median income. Should she get a job and then we file for Ch 13 instead of 7?

Thanks, I'm really at rock bottom and things are finally hitting the fan! Any advice would be great. Thanks.

[hansky]

You provide a lot of reasons for filing, and you say you have made the decision to file. What are your reasons for waiting? I am not sure what you mean by your question "How long do I have?" How long do you have for what?

[HHM]

First, to maximize the effectiveness of your intended BK, you need to STOP USING "ALL" your credit cards. If you have significant charges or cash advances withing 90/70 days, respectively, of the date you file, those charges will most likely not get discharged. Second, you need to figure out a way to live within your means, ASAP. You have roughly $4,583 per month coming in the door, you need to live within that. You need to do a budget asap and put it to use. The easiest way is to use cash for everything, except your Mortgage, Car Payment, and Utilities, once the cash is gone, you need to force yourself to go without (it will be a real wake-up call).

Third, there are various stages to collection, the phone calls will probably start in the next month (if they haven't already). I figure your question really is how soon could you anticipate being sued for delinquent credit cards? The range for lawsuits can be anywhere from as little as 6 months to more than 2 years from the date you first missed a payment. Discover Card and MBNA tend to sue quicker, everyone else usually waits about a year or more, and typically sells the account to someone else, and it will usually be the debt buyer that sues you.

What are your intentions with the House and car, if you had not credit card payments, could you afford to keep them. If you want to keep them, do not fall behind on payments.

[HelpMeFast!]

Thanks...

To the first reply asking what I meant by "how long do I have":

I meant how long before I should get the attorney and actually file. I've been using one of the cards up until this week. I wanted to put as much time in between the charges and filing that I can, but I don't know the reprecussions if I just completely stop paying the cards. I don't want to let it get past the point where I get sued and can't file. I'm completely new to this, so I just very nervous and shell shocked right now. I'm trying to do the right things but I don't know exactly how everything works.

To the second response:

I plan to keep the car and house (I've never been late on either). And yes, you are right about living on cash and within our means. We've been in La-La land mentally and needed a real wake up call. I've been living with most of this debt for almost 15 years playing the balance transfer game and paying big chunks when I'd get a bonus (only to run it right back up). Thanks.

[HHM]

You can still file BK if you have been sued, it just makes it a tad more complicated, but the end result is usually the same, the debt will be discharged.

You should make an appt. with an attorney BEFORE you stop paying your credit cards to make sure you know what your options will be. Consultations are typically free and you can glean some useful info. Then you will be in a better position to make an informed decision about stopping payments. However, if BK is the path you choose, most attorneys will recommend that you stop making credit cards payments immediately. No point in throwing good money after bad.

[HelpMeFast!]

One other thing...

What do I say when they do start calling? Do I just hang up? I'll try to avoid them, but if I get one on the line, what do I say?

Can I call them now and try talking to a supervisor to buy some time?

Will they try and contact my family? I get mail in my name at my Mom's house, but they shouldn't have the phone number there.

[hansky]

What do I say when they do start calling? Do I just hang up? I'll try to avoid them, but if I get one on the line, what do I say?

Can I call them now and try talking to a supervisor to buy some time?

As stated, see a lawyer now to get the process started (IF you have firmly decided to file). If you are going to do it, the sooner you do it, the quicker it is to the end. Your lawyer may have tips on waiting for some reason (perhaps getting the next paycheck for the fee), but rarely is that going to be an issue of a few days here or there.

Thus, if you do that, there is little reason to spend time and effort "buying time," talking to supvervisors, etc. They certainly don't take the call personally, and there is no need for you to spend time on it. Politely say you are not in a position to discuss it, and end the call.

[FilingOnMyOwn]

What do I say when they do start calling? Do I just hang up? I'll try to avoid them, but if I get one on the line, what do I say?

Can I call them now and try talking to a supervisor to buy some time?

Will they try and contact my family? I get mail in my name at my Mom's house, but they shouldn't have the phone number there.

You should forward your mail to your house, so you get it where you live. If they looked up that address they could probably find the phone number and possibly start calling there, yes. Forward your mail to you and if anyone calls there, your mother should tell them they have the wrong number, noone lives here by that name, hang up, and thats it don't answer any of their questions.

If you have been using your credit cards recently you may have to wait at least 90 days before filing, so you can expect them to be calling. Turn the ringers off on your land lines, install caller id if you don't have it, so you can return phone calls to only people you want, or you could turn off your land line completely and goto using cell phones.

Thats how you handle collections when you stop paying. It would take many months for them to sue you, so as long as you are planning to file within 6-7 months I wouldn't worry about it.

So stop using credit, stop paying, and start talking to lawyers. Don't go with any lawyer that wants to talk you into a chapter 13. You have no reason to do a chapter 13, and I wouldn't do anything to put your family over the median income for filing a chapter 7.