Balance Transfer Question

[halloweendmb1]

Let me start out by stating I have used the search feature but I have not seen this question posted, let me explain.

My wife and I transfered all our credit cards into really low fixed rate balance transfers but we did it into our parents name with their permssion in 2005, 2.99%-4.99% (80K). This was done with the agreement we would make the payments and we did all on time. We have felt bad about tranfering all our cc debit into their names and with work for the past year being tough we tranferred everything back into our names starting the sumer of 2007 through the final transfer back into our name Jan 2008.
We have never missed a payment but we can't afford them either. I quit my previous job which was 100% commission and now have a guarantted base salary plus commission, but we have 3 kids and my wife and I can't afford daycare for three kids. I got a pt job 20 hrs aweek 3rd shift making $15.00 an hr, which helps but it still isn't covering everything.
We can make out mtg pay., food, gas, utilities, taxes, car payment with some money left over but our monthly cc min payments are $1800. (total debt is $120K). We have been budgeting with cash only and haven't charged anything in months (4 months).
I am concerned abut the balance tranfers, they were all direct transfers nothing was put into our checking accounts. But we went from having $20K in cc debit 2 years ago to transfering everything back into our name to now about $120K.
Any light on this or how you think a trustee will view this is appreciated. We have learned a lot from all this and we will never used cc again, we have taken Dave Ramsey's 13 week course and it has changed us forever. I know the chapter 7 is inevitable but we are scared to death.

[halloweendmb1]

Let me start out by saying all the accounts we transferred the debit back into (our accounts) have been opened for a long time. We didn't opne any new accounts to transfer the money back into our name so on a credit report the accounts are quite old.

[MajorMike]

If this happened in January you should be fine. It looks like it will be 6 months between transferring and filing.

[halloweendmb1]

Isn't it true that if you have 100K + the trustee scruntizes your BK even more and with these technically coming from cards that were in our parents name (BTW all the same name) could that be considered abuse?

[Phillymanhere]

Halloween,

You probably need to talk to lawyers about this, as each district interprets the law slightly differently.

The thing is, you are NOW legally obligated to pay the debts because they are in your name right. I think that's generally what matters in bk. But run this by a lawyer, the transfer to other accounts in other people's names and then back to yours. My guess is that you're OK.

The people who are in tough shape are those who have major debts that are NOT in their name. If you had come here while the debts were on your parents' cards, then you'd be facing trouble, I think. In that case, you actually would not have any legal obligation, and the bk court is designed to discharge legal obligations.

But I wouldn't do any more of this transferring to other's cards. Sounds like time for you guys to get to a lawyer. Once you pick one you like and connect with and all, then you can get their advice on when to stop making payments altogether if you haven't done that already.

[PaKettle]

It's good that the cards are old accounts, it's good that you have 6 months between the last transfer and it's good that you haven't been using the cards.
All that is good.
But yes, the US Trustee often takes a look at debt over $100k, (I *think* they are mandated to do so?), and so you need to have a good reason for the debt, where the money went, etc... Your story here sounds reasonable enough to me.

But by all means discuss this with your attorney, the more info they have about your case, the better opinion they can give you about whether your Discharge will fly.

So it could be a little sticky, but to me it sounds like you should be okay. Let us know what your attorneys say. If I were you, I'd try to consult with at least 3 to get a consensus, and to pick the one you feel most comfortable with.

Here's a thread you might find helpful about consultations:

http://www.bkforum.com/showthread.php?t=21810

[halloweendmb1]

do the cc companies ever object because the balance transfer happened 9 months to a year ago if you made at least 7-9 ontime payments? We have three transfers at 10K-12K and probably another 6-8 cards with 5K-6K.

[Phillymanhere]

We can't really answer that question with great speficity. The people who can best answer are local attorneys who understand the way the trustees tend to interpret the law in your area.

The big problem for credit cards is often cash advances. These aren't cash advances right? ... So if there is a problem, it is not yours most likely. Trustees can overturn recent cc balance transfers. But that is an issue between the credit card companies, not of your concern. (The trustee can return a transfer back to the original creditor.)

But again, get to a lawyer. Schedule 4 or 5 free consultations. And look for those with heavy bk experience.

[halloweendmb1]

[QUOTE=Phillymanhere;171827]We can't really answer that question with great speficity. The people who can best answer are local attorneys who understand the way the trustees tend to interpret the law in your area.

The big problem for credit cards is often cash advances. These aren't cash advances right? ... So if there is a problem, it is not yours most likely. Trustees can overturn recent cc balance transfers. But that is an issue between the credit card companies, not of your concern. (The trustee can return a transfer back to the original creditor.)

Yes these were all balance transfers don't ever remember having the money put into my account and then writing checks that way. I either did them all electronically or we wrote the balance transfer checks they mailed to us. The checks aren't consider cash advances are they?

[Cali]

I am discharging 160k+. I am due to have my 341 in a few days.
My attorney said the UST might have something to say about my huge amount of debt, so be prepared.

Isn't it true that if you have 100K + the trustee scruntizes your BK even more and with these technically coming from cards that were in our parents name (BTW all the same name) could that be considered abuse?

[Stilltheone]

I once read about a case where a woman did a balance transfer 69 days before filing for bankruptcy. Chase fought it and lost. The court ruled in her favor because she basically wasn't acquiring NEW debt, just transferring old debt. I found it so interesting that I have it saved somewhere on my computer.

Good luck!

[halloweendmb1]

a balance transfer is not a cash advance correct?

What if you use the checks they mail you to transfer a balance is that a cash advance?