cash advances more recent than I thought!

[SinkingFast]

First issue to deal with here is the fact that the cash advances were on 2 different Lines of Credit. Creditors work LOC by LOC in BK.

The problem for you is that both LOC's are with the same Creditor. So chances are, the same attny will handle both "Objections".

Citi/Chase/BoA/etc, have law firms on retainer all over the country. Generally speaking, when a Creditor believes they have a legal leg to stand on, their first step is to have their attny contact your attny about the situation.

The Creditor's attny will threaten your attny with an Objection. Most times, the Creditor's attny is hoping for an amicable "Settlement". Haggling may go back and forth for several rounds before there's a decision on what will happen.

If your attny thinks they're blowing smoke, he/she'll blow it off. If your attny thinks they have grounds, then your attny will recommend you settle. It's cheaper all around. Cheaper for the Creditor. Cheaper for you.

And, as HHM noted,............. On rare occassions, Creditors do pursue Objections in Court.

[PaKettle]

THANKS, HHM, that really helps me understand things better, and maybe it will help others understand, as well. Thanks for taking the time to compose such a thorough and clear response!

Sorry for just giving my opinion, you're right, it isn't worth a hill of beans, I was just expressing my frustration and "callin' it as I sees it." It does seem unfair that the creditors get to question you and your attorney doesn't get to defend you... But life isn't always fair, is it? I just felt the need to vent a little I reckon. But your post really helps me see the picture more clearly and, well, hopefully I wont' get an objection.

So, let me ask this, to further clarify a little bit:
So, let's say a creditor objects, says you knew you would end up in bankruptcy and would never pay back the loan. Is there any info on the net or anywhere as to how a "typical objection" of this sort goes? What they typically ask, etc? How to best defend yourself? (I have not done such a search, here, yet.)

I assume having stats ready of what you did with the money and why you felt certain you could pay it back at that time, are your best defense. DOES the debtor get some leaveway in presenting his own case, in answering these questions, or does he just have to answer the questions, point blank, yes or no? (at the 341 meeting, I mean). And it would do no good to point out that the creditor SOLICITED YOU to take the loan and that the loan said "Use this for vacations, etc.", during this questioning? (I'm trying to get an idea here how to defend against an objection.)

Then, does the Trustee at that time (or later?) decide whether the objection is "valid" or not? Or is it just cut and dried - the creditor objects, therefore it either goes to trial or settlement - the Trustee has no say in that?

Also, let's say the debtor has NO leftover money after paying rent, car payment, school loan, utilities, etc.. What then? Can the creditor with a valid objection still force you into trial or a payment plan? What if there is zero leftover money to pay an objectionable debt? After all, the debtor IS filing bankruptcy!

PaKettle...let me just address some of your points. First off, my posts are designed to be informative and because of the nature of this site, are generally not directed to any one specific case. However, I am not going to engage in a debate about what someone thinks is fair or not, because that is not very useful to our members. In point of fact, I think you are correct, the credit industry is out of control and some of their practices are questionable...but that viewpoint is NOT going to win in court.

First, objections are rare relative to the number of BK cases that are filed, only a small percentage (i.e. single digit percent) ever see an objection. No fault of yours, but you are making the cardinal mistake of applying "common sense" to the legal world . You have to understand that "fraud" in the BK world is not the same as common usage fraud. Creditor's, when they do object, do not have to prove you intended to be "bad" (i.e. that you intentional took advantage of the credit)...although that does happen. All creditors have to prove is that at the time you made the objectionable purchase or cash advance, that no reasonable person could have a reasonable expectation to pay back that debt. The 70/90 rule "presumes" this fact based on the reasoning that if you file BK 69 days after a cash advance, there was no way a reasonable person could believe they could/would pay that back (after all, they filed BK 69 days later).
Outside of the 70/90 day rule, the creditor actually has to prove facts that make it more likely than not that no reasonable person, under the debtor's circumstances, could believe they could pay back the debt. Thus, the hearing in front of the BK judge usually focuses on the debtors financial circumstances at the time they made the questionable charge. I.e. What was your income, was your income enough to meet your living expenses, were you using one credit card to pay off another, what did you use the money for, were you using the credit for necessities, etc etc. The only time I see creditors win outside of 6 months is usually with business owners who are using their personal credit to prop up a failing business that is in its final death throw's. I.e. the debtor's sole income soure is the business, and the business is failing miserably, so the debtor resorts to using personal credit to prop it up, but then declares BK around 9-10 months later after using up all available credit. If the charges are large enough, a creditor might object.

As you have already learned, most objections never see the inside of a courtroom...because you are exactly correct, there is somewhat of a game that gets played between creditor and debtor...the creditor can usually offer such a favorable settlement that the debtor cannot take the chance of going to court (and yes, the debtor can rarely afford an attorney to represent them). Second, and to be honest, most attorney's who represent creditors won't even bother with an objection unless the odds are 60/40 or better in their favor. Most of the time when a creditor objects or makes an offer in lieu of objecting, they have a pretty strong case. The attorney's who represent these creditors work on contingency...so they are not going to even bother with a case unless the have a good shot of winning.

As to representing yourself, yes, you can represent yourself if a creditor objects.
And you are correct, the 341 meeting is an opportunity for your creditors to essentially have a free shot at you, you are under oath at the 341 meeting. (Keep in mind, the trustee IS NOT involved in creditor objections), but the SOLE purpose of the 341 meeting is for the BENEFIT OF YOUR CREDITORS. It's not called the 341 Meeting of Creditors for nothing. Keep in mind, by filing BK, you are asking the court to FORCE your creditors to forgive the debt you owe them, so there needs to be some mechanism in BK court for creditors to protect their rights.

[B12]

Thanks. Mine are piece meal and been dealing in cash only for 4 months trying to get a handle on it.

[HHM]

B12, I would not worry too much...the objections are fairly rare. Creditors generally look for relatively large transactions in deciding to object. In the cases I reference above, the debtor's made large cash advances that ultimately went toward paying business and personal expenses. If your charges are more piece meal, I wouldn't worry too much.

Again, I don't want to give anyone a false expectation, creditor objections are RARE.

[B12]

Wow, HHM, that is what I did. I used cc and home equity loan to pay for personal expenses cause business did not generate enough income.

Have you seen many objections in this case or any other negative ramifications?

[aa06a47]

Great post HMM,

PaKettle, there is still alot of "interpretation" in the bankruptcy law. A consertive judge will have a different interpretation than a liberal judge. That is why there seems to be no right or wrong answer in all this. Some people get to contribute to 401k's, some don't. Some debtors might lose an objection for cash advances in one court, and another very similiar case the debtor wins. Doesn't make alot of since all the time.

So no one here can give you a clear cut answer on if a creditor will object, let alone if they will win. On average, in my opinion, the age of your debt will tilt you toward winning in the event they object. It is an opinion though!!!!

[HHM]

PaKettle...let me just address some of your points. First off, my posts are designed to be informative and because of the nature of this site, are generally not directed to any one specific case. However, I am not going to engage in a debate about what someone thinks is fair or not, because that is not very useful to our members. In point of fact, I think you are correct, the credit industry is out of control and some of their practices are questionable...but that viewpoint is NOT going to win in court.

First, objections are rare relative to the number of BK cases that are filed, only a small percentage (i.e. single digit percent) ever see an objection. No fault of yours, but you are making the cardinal mistake of applying "common sense" to the legal world . You have to understand that "fraud" in the BK world is not the same as common usage fraud. Creditor's, when they do object, do not have to prove you intended to be "bad" (i.e. that you intentional took advantage of the credit)...although that does happen. All creditors have to prove is that at the time you made the objectionable purchase or cash advance, that no reasonable person could have a reasonable expectation to pay back that debt. The 70/90 rule "presumes" this fact based on the reasoning that if you file BK 69 days after a cash advance, there was no way a reasonable person could believe they could/would pay that back (after all, they filed BK 69 days later).
Outside of the 70/90 day rule, the creditor actually has to prove facts that make it more likely than not that no reasonable person, under the debtor's circumstances, could believe they could pay back the debt. Thus, the hearing in front of the BK judge usually focuses on the debtors financial circumstances at the time they made the questionable charge. I.e. What was your income, was your income enough to meet your living expenses, were you using one credit card to pay off another, what did you use the money for, were you using the credit for necessities, etc etc. The only time I see creditors win outside of 6 months is usually with business owners who are using their personal credit to prop up a failing business that is in its final death throw's. I.e. the debtor's sole income soure is the business, and the business is failing miserably, so the debtor resorts to using personal credit to prop it up, but then declares BK around 9-10 months later after using up all available credit. If the charges are large enough, a creditor might object.

As you have already learned, most objections never see the inside of a courtroom...because you are exactly correct, there is somewhat of a game that gets played between creditor and debtor...the creditor can usually offer such a favorable settlement that the debtor cannot take the chance of going to court (and yes, the debtor can rarely afford an attorney to represent them). Second, and to be honest, most attorney's who represent creditors won't even bother with an objection unless the odds are 60/40 or better in their favor. Most of the time when a creditor objects or makes an offer in lieu of objecting, they have a pretty strong case. The attorney's who represent these creditors work on contingency...so they are not going to even bother with a case unless the have a good shot of winning.

As to representing yourself, yes, you can represent yourself if a creditor objects.
And you are correct, the 341 meeting is an opportunity for your creditors to essentially have a free shot at you, you are under oath at the 341 meeting. (Keep in mind, the trustee IS NOT involved in creditor objections), but the SOLE purpose of the 341 meeting is for the BENEFIT OF YOUR CREDITORS. It's not called the 341 Meeting of Creditors for nothing. Keep in mind, by filing BK, you are asking the court to FORCE your creditors to forgive the debt you owe them, so there needs to be some mechanism in BK court for creditors to protect their rights.

[PaKettle]

Also if they object what benefit is it to them if you are a no asset case? You are obvliously broke so they would probally never see the money anyway so I dont think you should worry to much just in case try to be prepared to proove that at the time you received it you were paying bills still. And your situation changed after you took the advance. So personally if it were me I would not worry because if they do object I would go to court on it and not settle because I would be able to proove I was not behind at the time I did not use it to pay other cc bills with and I even paid on it for 2 months after and I would proove my situation changed after not before.

Thank you for your comments.
But don't they object, so they can get you into an agreement to pay back, say, half of the debt? This is what my attorney indicated they sometimes try to do. And if you are forced into such an agreement, don't you then have to pay or they can garnish your wages?

This brings up another question:
If a creditor such as this does object, and I want to fight it, do I have to use my attorney at $300/hour, or can I represent myself, instead? I would think I could present a case that I had every intention of paying back the money.

For one thing, I still have (had?) $15-20k available in credit from various creditors. If I were out to commit fraud wouldn't I have also used all that available money, as well? I could certainly have used one of those to pay off one of the 2 cards that made the $10k loan, thus minimizing my chances of that creditor objecting because I owe that one bank $10k on 2 balance transfers.

In fact, it appears I should have done this, in hindsight. However, the fact that I did not indicates that I was probably not planning bankruptcy at that point, and was planning to pay them off.

[PaKettle]

My thought is they won't go after your particular cash advances. The total was 10k, two different people, two separate accounts. Your lawyer is preparing you for the worst.

[snip]

Just to clarify - hopefully it doesn't make that much difference - the $10k was 2 different cards, but both my wife's, from the same bank (just 2 different cards).

[PaKettle]

That won't be the sole fact; but frankly, that fact is not a favorable one for you. If you are using credit to pay off "other" credit, that means you don't have enough income to meet your expenses, and therefore are insolvent and cannot payback debt you incur, ergo, you will probably lose.

Keep in mind, you're up a against lawyers' whose job it is to cast your situation in the most unfavorable light as possible...and in the cold confines of a court room, that is all the judge has to go off of in making their decision.

Again, this perhaps is an argument of how it "Should be" verses "how it is". But this seems very unfair to me. You say the debtor's attorney does not defend one in the deposition. Yet, the creditors' attorneys seem to have full privilege of presenting a case against the creditor. Seems the creditor is at a real disadvantage, in this 341 meeting IF there are objections!

As to your first statement - that the borrowing of balance transfers to pay off other debts means that the debtor is insolvent and cannot pay back debt he incurs - this is only one interpretation, and in reality it is not even the truth in many cases. The truth is, in the past (not in the case of this particular $10k transfer at the beginning of this thread, but in many others), I used balance transfers ONLY as they suggested, to pay off higher interest debts.

So are you saying that even if a debtor uses the balance transfer to pay off a higher interest debt, per the unsolictited offer's suggestion, it can be used against the debtor, as a valid reason for objection?

[PaKettle]

Correction, the rule for cash advances is 70 days, NOT 60. The rule for charges on credit cards (for non-necessities) is 90 days.
[edit]
Keep in mind the 70/90 day rule is hard coded in the BK code (under section 523, Exceptions to Discharge), the so called 6 month rule is more a rule of thumb...but I have seen creditors object to charges/cash advances as old as 9-10 months and win.

Why would some win and others not, in a 9-10 month old debt? Do you know what the major difference is in these cases where the creditors win the objection of a debt from 9-10 months previous?

Also, now that your in the realm of BK, you need to separate what "you think" things should be and how "things actually are"

Right. As to the balance transfers and how they are mailed out as basically advertisements encouraging the debtor to "buy" the loan, I was speaking in terms of how it "should" be, not how it is.

However, I would think that if one did actually go to trial or whatever it's called on an objection, a good attorney could make my case: that since they solicited you to borrow the money, with no language of "if you can afford it", or any other warnings, they have little right to object when you cannot pay it. In fact I have had attorneys tell me just that: that if they solicited you to take the loan, they have little or no case. I don't know if that's true or if they were merely saying it to give me confidence in them.

However, though I am no expert, I can't imagine a good attorney not being able to win a case like this, IF the debtor could afford to hire the attorney to defend him. However, as the system is set up, it appears that it is more of a game of the creditor playing the debtor for a compromise agreement because he knows the debtor does not want to pay the attorney to defend him.

As to the law itself, I would be happy to accept "how things actually are" If I could figure out HOW "things actually are"!

As in the case above, per your quote, there seems to be a lot of looseness in the interpretation of the law re objections of balance transfers, or the enforcement thereof.

By the way, I am not intending to be antagonistic, I totally appreciate your comments and appreciate your expertise. I am just playing devil's advocate to some degree and trying to learn how this all works.

[familyof7]

Also if they object what benefit is it to them if you are a no asset case? You are obvliously broke so they would probally never see the money anyway so I dont think you should worry to much just in case try to be prepared to proove that at the time you received it you were paying bills still. And your situation changed after you took the advance. So personally if it were me I would not worry because if they do object I would go to court on it and not settle because I would be able to proove I was not behind at the time I did not use it to pay other cc bills with and I even paid on it for 2 months after and I would proove my situation changed after not before.

[Bandit]

What did we use the money for? Some was used for dental for my wife, some was used for 2 vacations we went on in June, and maybe some was used to make payments on other accounts. I don't even have the bank statements to see what happened to the transfer money, because we closed that account a few months ago due to them raising their monthly checking fee from 0 to $5.

Pakettle, I would not be losing any sleep over this. The only other thing I would do at this point is have the medical bills & payments in a file for those portions, if I didn't already. .

"Ill have a cafe'-mocha-vodka-valium-latte to go, please!"

My thought is they won't go after your particular cash advances. The total was 10k, two different people, two separate accounts. Your lawyer is preparing you for the worst.

My thoughts as well. After careful study of 1.4.1, that is all it is.
It's too wishy washy for them to bother.

[aa06a47]

My thought is they won't go after your particular cash advances. The total was 10k, two different people, two separate accounts. Your lawyer is preparing you for the worst.

I was chapter 13, so creditors treat those differently, but I waited 100 days. I was a bad gambler who probably had 100 cash advances in the 1 year time frame before filing.
I had even made a trip to Vegas 5 months prior to filing....never came up.

[JRScott]

Pa I'd let your lawyer know.

However given the situation and time that has passed as well as the fact you did make 2 payments on it it may not come up. Just prepare yourself and the lawyer in case they do object. Your lawyer might have some good ideas how to combat it if it comes up. The burden would be on the issuer though at this point to prove you meant to defraud. So it is likely they will not object.