Has anyone had luck getting CC to drop rate to 0% to avoid BK?

[Kansas1960]

I was thinking about calling my CCs and telling them I was considering BK and request a 0% rate and lower payment. I would like to do this to put more distance between use and filing. I think I am overly worried something would come up and would feel better getting another 6 months in and then quit paying and waiting another 6 months. Is this plan unrealistic? Thanks in advance.

[Kansas1960]

continued.....

....currently I am using my cards and then paying the minimum only buying non luxery goods and paying bills. Is it a bad plan to use all my cards to about the minimum and then pay the minimum. I have been doing this the last 5 or 6 months to buy time but this plan won't last much longer since they have been lowering my credit limit.

[Kansas1960]

....continued again....sorry

....or would it be best to just stop using and stop paying and wait until right before judgements and then file. I am going to start shopping for an attorney at then end of this month.

[StartingOver08]

If you are insolvent - just stop paying and save money to hire an attorney. If you have had charges within 90 days of filing - that will be an issue as the Trustee assumes you knew you were not going to repay the charge as you knew you were insolvent. So, you must stop charging at least 90 days prior to filing.

The payments can be made after you have charged, but then you are just throwing good money after bad. Most people pay at least a couple of months after charging to show 'good faith' (no abuse). But the charging needs to stop at least a minimum of 90 days prior to filing.

[BornAgain]

If you have had charges within 90 days of filing - that will be an issue as the Trustee assumes you knew you were not going to repay...

...you must stop charging at least 90 days prior to filing.

...the charging needs to stop at least a minimum of 90 days prior to filing.

Hi. Okay, I understand from your post that filers must have a 90-day charge free period before filing because if they don't there will be an issue with the trustee. (Note: I haven't actually found that written anywhere else, but I have no reason to doubt you.)

I'm wondering, what -- exactly -- are the repercussions with the trustee without a 90-day no-charging period?

And do you mean the local trustee or the UST?

Thanks.

[StartingOver08]

Presumption of abuse = conversion of Ch 7 case to a Ch 13. Or dismissal of BK.

I am still looking for a better definition for you. Apparently the 'presumption of abuse' does not apply if you are under the median income as determined by the means test in a consumer filing.

If you are over the median income the presumption of abuse could apply - that is where the BK planning comes into focus. Most agree that getting a dismissal is the worst of all outcomes. The conversion from a 7 to a 13 is not delightful either, but preferable to a dismissal.

[BornAgain]

Wow. That's serious stuff for having some charges within a 90 day window. Thanks for looking up the law reference for me -- and everyone else who might come across this thread and benefit.

Okay, so charges within a 90-day look-back allows the trustee (UST, I assume) to presume abuse for any above-median filier.

When we get a link to a reference for that I'm going to nominate this thread for a sticky. Wow -- I just haven't seen that written anywhere. Scary -- I almost filed with food & gas charges inside of 90 days.

Again, thanks! :-)

[EricaCallaha]

Just stop using the cards...use the cash to pay for what you were charging....start saving for an attorney. The judgements will not come as fast as you think. It is not like they are going to sue you tomorrow for being 30 days late. There is a process that the CC's go through to try to resolve. Just be prepared for some nasty sounding letters and some rude phone calls. Make sure your answering machine works and you can put your ringer on low or off, then hunker down.

Good luck...

[WorkingItOut]

Small charges of necessities like food and gas during that 90 day period will not LIKELY cause any harm. But major luxury purchases will raise huge red flags.

Most likely if a creditor disputes any charges you made within that 90 day timeframe, the worst likely scenario is that you have to pay back THOSE charges. Charges made prior to that timeframe would get dismissed in the bankruptcy as normal.

Obviously, let me stress again, I'm only talking about necessities you couldn't manage any other way. It's still better to be safe than sorry and that means STOP charging within that 90 day timeframe unless you are in dire circumstances and have no other choice. You don't want to risk anything if you can help it. If you can't help it, and it's just a small charge or two, don't sweat it.

[StartingOver08]

I found a better definition here (easier to understand the time limits):

http://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_and_Consumer_Protection_Act

Of course you might want to go right to the BAPCA code to see how it is worded.

[BornAgain]

Most likely if a creditor disputes any charges...

Thanks for helping moderate my panic, WorkingItOut & Erica. It seems that maybe charges for food & gas inside of 90-days isn't a huge red flag for the credit card companies. Yeah, I can't see them dispatching a lawyer to recover $250. LOL.

BUT the fact that StartingOver08 points out, and what may come to haunt many people, is that the trustee will take issue and can presume abuse if there are any charges at all inside of 90 days (for an over-the-median filier). That's scary stuff and I think it needs to be publicised more; although I'm just a newbie here I have done a bunch of reading and research and somehow I managed to miss that huge, huge issue.

Again, thanks all.

[BornAgain]

....or would it be best to just stop using and stop paying and wait until right before judgements and then file.

The trick is, one never knows how long it'll be before suits get filed.

[OhioFiler]

The trick is, one never knows how long it'll be before suits get filed.

They have to serve you notice of the filing. If a process server is knocking on your door you know the suit is coming. If you get mail from the court you may already have been sued. You still have time. The court date is often 30 days or more into the future. You can request a delay if needed. You can challenge the validty of the debt and postpone the action long enough to file BK.

[momxx5]

I am going to try to answer your original question.

I have had 2 cc companies put my account into hardship with 0%. Doing so closed the account and set up autopayments. They basically take your balance and divide it by 12 or 36 months to determine what your min payment will be. Well this worked for us for about 6 months.....but actually looking back it really didn't work because we were putting money into a sinking ship.

Now, we DHs decrease of income, increase of health ins., etc we are not even able to make the min payments.

I guess it will look good, I hope, to the Trustee that we tried all we could before filing.

I have to say that once you start to think BK might be the only way out....you are usually already in that situation.

Good luck.

[kathy4530050]

I was thinking about calling my CCs and telling them I was considering BK and request a 0% rate and lower payment. I would like to do this to put more distance between use and filing. I think I am overly worried something would come up and would feel better getting another 6 months in and then quit paying and waiting another 6 months. Is this plan unrealistic? Thanks in advance.

I don't know who your creditors are, but if they are anything like mine (CitiBank, Wachovia, Bank of America, GM MoneyBank, etc.) I wouldn't hold my breath. Not only wasn't I able to negotiate lower interest rates, like so many people on this forum, on some accounts, my rates went from less than 5% to 29% overnight for no other reason than they ran a credit report on me and didn't like my debt to income ratio. No one I tried to talk to would work with me in any way, shape, or form. In the past, I would sometimes just call a bank and ask if they were running any promotions for new cardholders that I might be eligible for and very often I could get in on that. But I get the feeling those days are long gone. I stopped paying on all credit cards last July and wish I had done that months earlier. I made the mistake of not realizing the severity of my financial problems until the ceiling caved in.