Cash Advance and Chapter 7

[Logan]

I just did a couple cash advances and now I've decided to file BK. I have the money to pay back in the amount of the advance. The advance is on top of a balance already on the card.

If I pay it back before filing is that ok?

Can I just reaffirm that portion of the debt.

Desperate times can lead to desperate measures.....

Logan

[SinkingFast]

Are you really gonna file within 90 days??

Do you NEED to file within 90 days??

If you're under the gun to stop a Foreclosure or some other dire circumstance, that's one thing. Otherwise, you can afford to wait. Then the cash advances won't be an issue.

Patience is the BK Filer's friend!

[Logan]

Sinking,

I agree but I need to do it quickly for numerous reasons. I used one cash advance to pay off another unsecured loan with the same credit union, another to pay rent etc. and one for a transfer. I can come up with the money to pay it off in under two weeks time from the advance so my true question is how will the creditor view it?

I'd just assume give the cash advance back and proceed with the BK.

Thanks,

Logan

[JRScott]

Assuming you have a balance with the cards in question then any money you pay will be used on the oldest part of the balance first and not the cash advance. If at all possible you need to wait 90 days after the last cash advance to file bk.

If you can't due to foreclosure etc, then you most likely will be held responsible for the cash advances.

[SinkingFast]

It's not how the Creditor will view it that's your worry. The real worry is the Trustee.

Payments in "the aggregate" of $600 or more within 90 days prior to filing to Creditors must be disclosed. The Trustee can consider such payments "Preferential" and go back to the Creditor for the money.

If that happens, your Ch 7 becomes an Asset case. The Trustee waits to get the money back from the Creditors you paid within 90 days prior to filing. The Trustee then notifies all Creditors there's money to be had.

The Creditors have 60-90 days to put in for their piece of the Asset pie. The Trustee decides who's gonna get how much and disburses the funds. Then there's an Audit to show who got paid how much money. All that has to happen before your case can Close.

It just bogs down your case.