Credit Card - I overstated my income

[PaKettle]

JustDo, it sounds to me, based on the opinions in this thread, that you might be best off to wait until the debt is sold to a junk debt buyer... So it's the old bankruptcy equation: debt plus more time = less chance of problems. Can you wait 6 more months or so more, to file?

IF you can wait that long to file - just stop paying your debts, put an answering machine on your phone with your names in the greeting so they know they've reached the right number, ignore the messages, erase them... and go on about your life. It will get annoying. It will get tiresome. But if you can wait, that will help.

Of course, the other problem with this waiting game is that it puts you in a position of extended poverty. I know I wanted to get my bankruptcy over with so my wife and I can look hard for better jobs and more income. But when you're waiting out a bankruptcy, you are stuck in "status quo" mode unless you want to risk being thrown into a Ch. 13.

I had $20k taken from 3 cards at the end of last year, but they weren't new cards. But still my attorney wanted me to wait until Dec. to file, to "put a year between those cash advances and the filing date". I compromised with him - we filed in mid November. I will let you know how mine turns out... However, unfortunately, the bankruptcy process seems to be one in which a lot of chance is involved. I think whether or not creditors object is based not simply on YOUR CASE, but rather on the mood of the creditors, the economy, and many other things we may not even be aware of. I say this because I've heard so many stories where some "got away with murder" in terms of tons of recent debt discharged, while others get objections when there was not so much recent debt. Seems to me a lot of it is just plain "luck of the draw".

As to the exaggerating income on applications I'd be surprised if MOST people did not do that! Of course, it depends on how much you exaggerated. Again, I imagine it is partly luck on who your creditor is and how concerned they are wtih bankrutpcy cases.

If you transfer the debt to several other creditors and wait 6 months this might give you a better "profile". But I'm not sure. You'd have to make payments on those new loans, at least a couple payments on each one, or else it would look really bad I would think.

But I'm no expert, I'm just guessing based on stuff I've read, mostly here. Consult attorneys on this issue! You can be up front with them, there is client/attorney privacy. Not sure I'd trust a Trustee/attorney with that kind of question, though, personally...

So, "best of luck!" to us all!

[keepmine]

but from a practical standpoint, the junk debt buyer usually does not get enough account information to even formulate an objection.

From HHM's post #11. Bk court is not where debt collectors want to be. The following case isn't really on point with the OP's question but, should they {3rd party collectors} file a claim, they will be expected to prove they have a right to collect and as HHM suggested, often times all they have is some worthless affifdate of indebtness where they purchased the debt as part of a portfoilo.



Claims Purchaser Violated Rule 9011 in Filing Proof of Claim

In an opinion examining "the standard operating procedures of one creditor whose entire business centers on [the] purchasing and filing of bankruptcy claims and the receipt of dividends on account of such claims," an Ohio bankruptcy court has ruled that the claimant violated its obligation under F.R.B.P. 9011 to make a reasonable inquiry prior to filing its proof of claim against the Chapter 7 debtors. The court declined to award sanctions, however, finding that none were warranted in light of the time and energy devoted by the claimant's senior management in response to the court's show cause order.

After purchasing, at a significant discount, a portfolio of alleged bankruptcy claims, the claimant filed a proof of claim against the Chapter 7 debtor-husband for "money loaned." The debtors, who had not identified in their schedules any claim for the claimant or for the entity identified in the claimant's proof of claim as the originating creditor, objected, asserting that, to their knowledge, they did not have any indebtedness to the originating creditor and, hence, to the claimant. The court directed the claimant to find the supporting documentation for its claim, and stated that it was not going to simply allow the claimant to withdraw its claim. The claimant, however, purported to withdraw its proof of claim, thereby ignoring a specific court order as well as F.R.B.P. 3006, the bankruptcy rule governing withdrawal of claims. The court then entered a show cause order directing the claimant, which filed numerous claims in this and other bankruptcy courts, to explain fully its routine for filing proofs of claim in bankruptcy cases and raising the issue of whether Rule 9011 sanctions should be assessed against it for having filed an unsubstantiated claim. In response, the claimant filed a pre-hearing brief, accompanied by the sworn declarations of its president/chief operating officer, its operations manager, and its in-house attorney, and a show cause hearing was held.

The court began its opinion by noting the "exponential increase" in the trading of bankruptcy claims that has occurred over the last two decades, fueled, at least in part, by technological developments such as electronic case filing (ECF) and proprietary software that is able to conduct searches with limited human attention. "Once a fairly low-volume activity restricted to chapter 11 cases (and primarily undertaken to achieve strategic influence in chapter 11 cases), claims trading now also routinely occurs through the purchase and sale of `claims portfolios' in consumer cases," the court observed. "Apparently lost in the fast-paced world of selling and purchasing bankruptcy claims has been attention to compliance with long-established bankruptcy procedures for filing proofs of claim," the court stated, adding that the claimant would have this and other bankruptcy courts accept "industry standards" as excusing its noncompliance with F.R.B.P. 3001, the bankruptcy rule governing proofs of claim, and its failure to fully complete Form 10, the official form adopted in conjunction with that rule. "Thus, this case poses the central question whether an industry that has grown up solely to operate within the bankruptcy system can expect courts to ignore procedural rules that were in place prior to the birth of the industry because compliance with those rules would not promote maximum efficiency for the claims trading industry."

Rule 9011(b) focuses upon the circumstances surrounding the filing of a document that is later subjected to Rule 9011 scrutiny, the court explained. Rule 9011(b) provides, in pertinent part, that, "[b][b]ecause of the time and energy that [the claimant's] senior management devoted in response to this Court's show cause order . . . the Court [did] not view any further sanctions to be necessary." In re Wingerter, 2007 WL 2932809 (Bkrtcy.N.D.Ohio, Judge Shea-Stonum).