New loan, new credit card waiting 90days

[momoftwo]

I met with an attorney today for a consultation for chapter 7 bankruptcy. I have a personal unsecured loan with Capital One that is over a year old, and my mother is a co-signer. I applied to Cap One this week for another loan using only my credit. If approved I would pay off the other loan to relieve my mother of any financial obligation.
The original loan was for 10k and now has a balance of 7700. The loan I applied for recently is for 20k. If I should decide to use the rest of the money to pay for attorney's fees, back income taxes (that are not dischargeabe) and living expenses for the months to come I would have to reaffirm the loan. But, if I only transfer the orginal loan balance and return the remaining $ to Cap One my attorney says I will still have to wait the 90 days. Do I have to make the minimum payments on this loan over the next 90days?
One more question. I just received notice that I was approved for a new c.c. Do I tear it up or can I use this over the next 90days and make the minimum payments as long as there are no major purchases or cash advances over $500?

[JRScott]

I'd not get a new credit card at this point.

Since you've already applied for it if you get it accepted I would make minimum payments for at least 90 days on the new loan. I'd also look at delaying filing for at least 6 months to a year to be sure they wouldn't raise questions.

[momoftwo]

I have been using my credit to live, hoping my business would someday take off and get me out of this debt. My credit at this point is perfect, but my credit usuage is high since the cards are all getting close to their limits, which is making it more and more difficult to obtain credit anymore.

I had applied for this new loan and credit card before I even thought about filing for bk. It was only after speaking to a friend regarding my situation and trying to figure a way out of this mess that filing bk was ever an option.

My mind has been racing with questions and scenerios ever since. I am most concerned about the loan with my mom, and I am willing to reaffirm this new loan with CapOne to get it out of her name. I don't know if I should keep the 20k and reaffirm or pay the other Capone loan off and return the remaining money to Capone and file on the $7700.
If I understand you correctly your advice is to make min pymts on the new loan for the 90 days if I only use it to pay off other CapOne loan and return the balance.

As far as the new cc goes I guess I should just tear it up because I cannot wait 6months to file. I am out of money and out of resources to keep up any payments.

Do I understand correctly that only new accounts,ones with questionable purchases or cash advances should be paid on during the 90day waiting period? Is that not considered preferential payments? For example, if I don't reaffirm on this loan and make the payments over the next 90days, and say I keep the new credit card and make the min payment on it as well, but make no payments to any of my existing creditors. How does that look?
Thank you for your advice and for taking time to answer my questions.

[butterflywings]

You cannot take out new credit after having a BK consult; you could land in big trouble for fraud. I'd watch it if I were you. A credit card company or loan company can easily file an objection even if it's been after the 90 days. They are more than used to seeing filers run up a card and then "waiting out" the 90 days.

[keepmine]

Your best bet is just kep paying the loan where your mother cosigned and then, reafirm it in the bk.
I'd not take that $20K new loan or touch that credit card. The hole is deep enough. Time to stop digging.

[momoftwo]

I don't know if my writing is not clear or if you are not reading clearly. I said that the loan and credit card were applied for before I had even considered filing for bk.

I had applied for the 20k loan to consolidate some of my credit card debt and my friend and I were going through all my bills trying to come up with the best solution to lower my monthly payments. After putting it all on paper it still looked like a dead end for me. It was only after I started to think about filing that I thought about using the 20k loan to just payoff the loan with my mom. Both loans are with CapOne and I would return the balance of the 20k to CapOne. It would be the same as filing against them right now except I am trying to relieve my mother of any financial obligation.

As far as the credit card goes, I applied for it the same day as the loan (before any thought of filing for bk). I needed something to use to pay for gas, groceries, diapers, etc. I had exhausted all other cc's. As I stated earlier, now that I am considering filing I will tear up the card. I was only asking about preferential payments in the case that I only paid off the cosigned loan.

I have not fully decided to file for bk. It is only something that I am contemplating at this time. I went to an attorney to find out what my options were and if it sounded to him like something I should do in my financial situation. I have perfect credit right now, and I still have hope that things will get better. Yet, I know that I have to be realistic. I have never not paid my bills and it would be a difficult thing for me to let a bill go unpaid. I honestly don't know if I can do it.

[HHM]

If your living on your credit cards, it is premature to file BK.

From a practical stand point, the cardinal rule of BK...you must have at least as much income coming in as you do expenses (and you need to CUT your expenses). If you file BK, while your cash flow is negative, you are essentially wasting a BK, because you are going to end up going into debt after the BK is over.