What would happen

[Overmylimit]

I am trying to make it for the next 5 months to file but as many of you have read in my other threads I am starting to get creditors seeking judgments. My question is what will happen if I file sooner and they don't allow credit lines to be dismissed? My line of thinking is I can't possibly be the only one who used credit for business very close to the time they file.. what is the worst case?

[jessegirl]

When is the last time you charged something?

[BROKENN]

I used a business account within the 6 monthes but in the beginning. When my atty filled out my matrix he used years, on the one business, he wrote the month and year. He still swears its all OK. But I'm not done with my BK, so we'll see

[rock_lobster!]

I think the cutoff for fraud is 90 days. Meaning a charge of $500 or more within 90 days of filing is presumed to be fraudulent (i.e.- you had no intention of paying it back) and if found so would be non-dischargable.

You should wait the 90 days if you can... otherwise I think you run the risk of it not being discharged.

If a creditor sues you, okay, then the court process takes as long as it takes and even if they win, you're still in the same situation you are now - you owe them money. Even if they garnish your wages in the meantime, this is only until you actually file for BK.

But if you blow it and file too soon and it's fraudulent, then you could *really* get stuck with it if your case is dismissed.

My 2 cents.

[JRScott]

If they chose to object they would have to do so on a line by line basis on the account.

If it was normal business expenses most likely they would not object, if it was big ticket item or something that might result in an asset they might well object.

Have you actually been served by the Sheriff Dept., or is it just threats so far. Once you are officially served you have around 30 days to respond in most jurisdictions. This means you'd have time to file in that time if you had to. That's what I did .

[rockyroad]

Our online buisness requires us to use c/cards. We sell items that we don't actually "own." We are brokers who sell on our website and turn around and pay vendors who drop ship the items. There are Net 30's in our biz. We have to give our vendor a c/card for payment. At the same time, we are paying on the one card we are using. It's not like we are using it and not paying it, with anticipation of filing BK in a few months. I can see where that would constitute fraud.

There is really no other way around using this card since this biz is our "job." There is no other income. Any suggestions for our situation?

[JRScott]

How will you make money after the bk?

You do realize it is highly unlikely any cc will survive bk?

[rockyroad]

All cc's are in my name and the biz cards are PG by me. DH's credit wasn't great back when we started this biz. Everything is due to fall off his report in Dec. and will hopefully be able to obtain at least one card with a nice CL. Already has a 5k Discover and a 5k WaMu with 2 negatives.

If worse comes to worse, we will just have use a debit card attatched to the biz bank acct.
And yes, unfortunately, I do realize that the 300k in available credit I have will soon die a natural death. The bad news is I have nearly that in unsecured cc debt due to getting this biz going, however, we now have a pretty viable biz...just unable to pay that AMEX OPEN in full.

[ansky0007]

All cc's are in my name and the biz cards are PG by me. DH's credit wasn't great back when we started this biz. Everything is due to fall off his report in Dec. and will hopefully be able to obtain at least one card with a nice CL. Already has a 5k Discover and a 5k WaMu with 2 negatives.

If worse comes to worse, we will just have use a debit card attatched to the biz bank acct.
And yes, unfortunately, I do realize that the 300k in available credit I have will soon die a natural death. The bad news is I have nearly that in unsecured cc debt due to getting this biz going, however, we now have a pretty viable biz...just unable to pay that AMEX OPEN in full.

...

I am in the same boat... I owe Amex alone a total of $190k... Until recently I was buying merchandise and selling it at cost or close to cost to raise money to make the payment each month but the balance was going nowhere except from one month to the next. My business was failing hard selling things at a loss just to keep making payments so I finally gave up. Over 4 years my monthly payment went from 30k to $190k just moving what I was short each month to the next month buy making sales at incredible prices but I have no inventory and have no money. Rotating money every 30 days while never actually paying it off because I was charging more than I was paying each month.

[rock_lobster!]

If you have one account in good standing, you could possibly re-affirm it to keep your business going.

Kind of depends on what type of BK you're filing too. In a Chap 7, you may have to shut down your business....

[paintinrosesred]

We use our debit cards for business expenses. We haven't found any problem using our debit cards vs cc. Hope this helps.

[ansky0007]

We use our debt cards for business expenses. We haven't found any problem using our debit cards vs cc. Hope this helps.

This is how we are currently running our business but its very difficult. Its a whole different world running a business from cash.

[paintinrosesred]

You said it ansky0007. We've learned a lot about running a business (two actually) with cash the last five months. I couldn't buy groceries early this week. Not complaining... prefer this method to the old one. We just keep our finger's crossed that a major repair or bill isn't needed because there is no cushion any longer.

[ansky0007]

Its been real tough.. I used to carry $30k to $50k+ in inventory and now I carry around $6k to 8k so I am also paying higher prices because I would buy 20+ of an item and now I place orders of 1-2 pieces of an item. Its definately been a learning experience. Now only if the economy would pick up for the holidays I might actually be able to buy the kids some stuff... Thats the hardest part for me now telling my 2 & 5 year old no all the time anytime we go anywhere.

[rockyroad]

We were charging $180k per month on Amex and paying in full with the next months profits. We always knew we were going to be in big trouble if we had a bad month that couldn't cover the previous. Well, it happened when the gas prices went sky high this past summer and the economy was sinking.
We just stopped paying them altogether and they have barely even called.

We are actually using just about 25k in credit lines right now and just paying them every other day. It's a hassle, especially with CitiBank who only allows four payments per month!
Eventually we are expecting action from Amex but for now we just try to use our credit strategically while we still have it.
Does anyone know if it's possible to reaffirm an account that is current. I have at least $75k in available cards carrying zero balances.