uh oh, my lawyer says....

[Bandit]

I hope I'm not a little of here, we had refinanced our home in Nov taking out 8k for a new roof. We filed Dec 3. We knew that we were going to file at the time of refinance, but we do plan on paying our home outside the bk of course. We plan on surrendering 2 other properties, but one of the mortgage companies is wondering how we just refinanced our primary when we are intending on surrendering. We refinanced through the same creditor. Even if we hadn't refinanced, we would have still filed for BK. Our 2nd was an interest only and we had to convert to a fixed P&I payment before the filing, otherwise we wouldn't have been able too. Do I have anything to worry about?

you know it is funny that you bring that up. I was just talking with my mom about a similiar thing with her. The only difference was she was so in debt that the bank with her mortgage would not give her another loan.
The funny part was this: They told her, her credit rating & score is so good, then told her to go file BK & when the BK is over they would give her as much as she needed for home repairs.

Is that a kick in the pants or what?
I am not saying that works for everyone but it did then

Nov. 8K for a new roof? I don't know. Maybe just sit that out for a couple of months pay the mortgage, enjoy the new roof & not worry too much

[Lindsay]

Just be glad it was with BOA & not one of the more aggressive banks out there

That's true! We have barely heard a peep out of Bank of America since we stopped paying 6 months ago. A few calls (very nice and understanding collectors), a 50% settlement offer, and some letters in the mail. Nothing aggressive like Discover, Chase, and Citibank have been doing with calling 15 times daily, sending Christmas cards with collection letters in them and actually filing a lawsuit.

How long do the creditors have to object? I've heard 90 days and 6 months. What if someone waited a year? Would that completely eliminate the chance of an objection?

[jp2861]

Let's back-up for a second...I think you are misunderstanding what needs to be proved for "intent". The standard of proof is NOT that you actually intended to defraud the creditor. Creditors (and really for any lawsuit), intent is proved based on actions and circumstances. All the creditor has to prove is that you were in financial trouble at the time you made the transaction (i.e. that you were insolvent), or that no reasonable person could have expected to be able to make the payments. So, in that respect, these cases are actually quite easy for a creditor to win. But objections rarely see the inside of a court room as it is usually more cost effective for the debtor and the creditor to settle the matter.

The standard of proof most certainly is that a debtor intended to defraud the creditor. This could come in the form of using credit when it's obvious there was no possible way of paying, knowingly providing false information on an application or using credit when you knew you'd be filing a bankruptcy. These "actions" were accomplished with the "intentions" of getting something that isn't rightfully yours. If these cases were easy to win I highly doubt they would be tossed to the wayside as they seem to be. There's just too much cheap labor available to process these "easy" cases. Are you saying that every case that doesn't reach a settlement is just tossed away? I don't buy the assumption that "easy" money is not being pursued by creditors.

[Bandit]

Are you saying that every case that doesn't reach a settlement is just tossed away? I don't buy the assumption that "easy" money is not being pursued by creditors.

Most of them are just tossed away if it is not worth their time & little gain. They will definately want to settle out of court before going thru any litigation or try to prove anything & what I have seen a lot of times is they write or call the attorney immediately & try to get a settlement before it ever goes to the 341 & that is one way for them to 'win' so to speak.

But you are also right because creditors do pursue cases. For example you could have the whole BT of 80,000 forgiven but that last purchase at Old Navy will go to 341 & object over 300 bucks.

Now explain that & how goofy it can be

[Bandit]

That's true! We have barely heard a peep out of Bank of America since we stopped paying 6 months ago. A few calls (very nice and understanding collectors), a 50% settlement offer, and some letters in the mail. Nothing aggressive like Discover, Chase, and Citibank have been doing with calling 15 times daily, sending Christmas cards with collection letters in them and actually filing a lawsuit.

How long do the creditors have to object? I've heard 90 days and 6 months. What if someone waited a year? Would that completely eliminate the chance of an objection?

Hi Lindsay

I remember awhile back when Chase sent you that silly consolidation deal. You were right, not to do it.
BOA is a better one & I am glad I have them for such a long time.

The ones you listed along with AMX & MBNA are the worse to deal with if people owe a lot or recent charges.

I am not sure what you mean by one year objections. In general after the discharge, they don't object but every once in awhile I see a story where that does happen where they go back & try to re open a case with objection well after the case is closed. Sometimes there is no rhyme or reason to things & like a broken bone, it heals & what you get is what you get.....


unless of course you want to break the bone again

[ssdsco]

All the creditor has to prove is that you were in financial trouble at the time you made the transaction (i.e. that you were insolvent), or that no reasonable person could have expected to be able to make the payments. So, in that respect, these cases are actually quite easy for a creditor to win.

Aren't most people insolvent for many years leading up to BK ? If so the creditors could object to years of credit usage ? I think I'm missing something.

[Lindsay]

Aren't most people insolvent for many years leading up to BK ? If so the creditors could object to years of credit usage ? I think I'm missing something.

I know for us this is true. We didn't open any new credit lines in the past few years or do balance transfers/cash advances, but we were in deep trouble for a long time. We were using all of our cash to pay for minimum payments and charging what we needed like groceries, gas, even some utility bills. This and 30% interest rates caused the debts to spiral out of control (we owe $80,000+). But I had hoped the situation would turn, like a better job would be offered to my husband, our Ebay business would start producing again, ect. I even went back to college full time (while working full-time as well) hoping that I'd get my degree and a good job before everything self-destructed. I will earn my degree in May 2008 and we just ran out of time. Looking back though, we were definitely bankrupt for years before we stopped paying our creditors.

[Bandit]

Aren't most people insolvent for many years leading up to BK ? If so the creditors could object to years of credit usage ? I think I'm missing something.

LOL! That is exactly why we end up in BK but there are different reasons & circumstances that are tolerated & others are not tolerated.

I would not exactly say only for many years because some people can become that way over night & the only way out is a soon BK.

For example I saw someone around here taking out cash advances constantly, every month to live on, BUT! he had no job or income to pay it back at the time of taking the loans & making that min. payment to get by. That is not a good one to take to BK if they want to pursue it he will lose. In fact everyone here told him to get a job, any kind of job to show he would not be insolvent for taking that money & stop taking cash advances.

[ssdsco]

For example I saw someone around here taking out cash advances constantly, every month to live on, BUT! he had no job or income to pay it back at the time of taking the loans & making that min. payment to get by. That is not a good one to take to BK if they want to pursue it he will lose. In fact everyone here told him to get a job, any kind of job to show he would not be insolvent for taking that money & stop taking cash advances.

That person could get a job making $100k a year but if his debt is greater than his assets he's still insolvent.

I'm still confused about this. To many beers I guess.

[Lindsay]

Bandit, Chase actually sued us right after their little consolidation deal. They have been the worst! They still call all the time on the phone. They even sent a Christmas card envelope with "happy holidays" hand written on it and inside was horrendous collection letter! As far as the one year past objections, I'm just kind of curious. I don't anticipate them filing any objections against us as we never traveled, took cash advances or bought luxuries. All but 2 of our credit cards are between 8-10 years old with regular on-time payments being made for all those years. The other two cards are about 3 years old. Its also been over 6 months without any credit card use at all. That kind of pleases me in an odd way, I can't believe we survived Christmas (a very modest Christmas,LOL) without charging anything. That is a first! After this experience, I don't think I'd ever get another credit card.

[Bandit]

That person could get a job making $100k a year but if his debt is greater than his assets he's still insolvent.

I'm still confused about this. To many beers I guess.

having debt greater than your assest is not what makes you insolvent. borrowing money when you have no way to pay it back at the time you borrow it does. You have to look at time factors & when the money was loaned, how much was borrowed, income,- not just debt & assets.

Just because you borrow money does not make you insolvent.

There are also 12 different factors that judges look at to determine all this, not just the few examples we have talked about.

It will all come to you in time & make sense. It was a bit confusing also for me when I first started looking at it.

[HHM]

The standard of proof most certainly is that a debtor intended to defraud the creditor. This could come in the form of using credit when it's obvious there was no possible way of paying, knowingly providing false information on an application or using credit when you knew you'd be filing a bankruptcy. These "actions" were accomplished with the "intentions" of getting something that isn't rightfully yours. If these cases were easy to win I highly doubt they would be tossed to the wayside as they seem to be. There's just too much cheap labor available to process these "easy" cases. Are you saying that every case that doesn't reach a settlement is just tossed away? I don't buy the assumption that "easy" money is not being pursued by creditors.

People tend to confuse "intent" with "malice". My point is, the creditor does not need to prove you took the money with an "evil mind" so-to-speak.

I am not sure where you are getting the "so many tossed to wayside" fact.

[danaf]

A large majority of my debt is with BOA too and that is worrisome for me. The accounts weren't new and I was solvant when the transactions occurred.

That is why I will have a paralegal prepare my bk forms and *reserve* any excess money for if I truly end up needing an attorney. Although, given the circumstance, I would probably settle. The exemptions from the previous state I lived in are fairly generous for cash on hand so that will come in handy.

Also, I'm waiting as long as I can. But when the time comes, I'm just going to have to take my chances and whatever happens, happens.

[PaKettle]

Let's back-up for a second...I think you are misunderstanding what needs to be proved for "intent". The standard of proof is NOT that you actually intended to defraud the creditor. Creditors (and really for any lawsuit), intent is proved based on actions and circumstances. All the creditor has to prove is that you were in financial trouble at the time you made the transaction (i.e. that you were insolvent), or that no reasonable person could have expected to be able to make the payments. So, in that respect, these cases are actually quite easy for a creditor to win. But objections rarely see the inside of a court room as it is usually more cost effective for the debtor and the creditor to settle the matter.

A debtors best defense is TIME, and at least having made some of the payments. On average, most debtors will not see any objections to balance transfers, charges, or cash advances if the debt is more than 6 months old. Unless something obviously sticks out from the filing or the nature of the charges that raises a flag for a creditor, the creditor won't even investigate.

So, although there is a mechanism for creditors to object to the discharge of their debt...it really only happens in the most obvious circumstances, creditors (and their attorneys) will not go to the effrot to test every nuance of the law or see how far back they can push the timeline, because simply, its not cost effective to do so.

HHM, do you know of anyone who has successfully defended THEMSELVES (not using an attorney) for a creditor objection?

Also, in your Opinion, are creditors somewhat likely to back down if the creditor challenges them, refused to settle and demands to take it to court? (That is unless they have some kind of really good evidence you were insolvent at the time you borrowed or something of that nature.)

And what CAN they use, as evidence to win their case? What would be circumstances under which a creditor would win an objection like this, whereas say $15k+ was taken out in a cash advance or balance transfer 9-12 months before filing?

[HHM]

Pa, I think you need to cross that bridge when you get there. Worrying about it now is really not helping.

You have done everything you can do to file your case, worrying about something that is beyond your control is pointless. If the creditor files an objection, worry about it then because there is NOTHING you can do at this point.