using CC's before filing

[Rumpole]

I have had to use my cc's to pay for essentials; gas, food, utility and phone/tv/internet service bills on a monthly basis.

If I file for chap 7 how will this be viewed?

[AfraidOfBK]

Well you have to get to BK somehow, I think charging cc's for necessary expenses is a fairly common way (Thats what happened with us)....
When do you plan to file? Are you still using cc's?

Anyone that could answer this question would really help me out, im wondering hte same thing!!! If i continue to pay the min pmt on cc's, can i still charge on them up to BK filing...at what point before i file (planning on June-July 09) must i stop charging ccs???????

THANKS!

[Kansas1960]

Me too!

I am in the exact same situation. I have been paying the minimum and charging close to what I pay each month. I cannot pay my bills if I don't use them for the basics. I am having to charge groceries and all utilities and gas and use my whole paycheck for mortgage and cc minimums. What do stop doing first? I want to wait to file until December.

[Rumpole]

Thanks AOB, right now it is a vicious cycle, I need the CC's to pay necessities but I'm just increasing the CC balances that increases the cc payment that leaves less cash to pay the necessities so I use the CC's to pay the necessities and on ad infinitum.

I just had to use a CC this am to pay the AT&T bill. I feel certain that phone and internet provider are ok from things I have read, but I'm not clear on the TV thing. I have cut the TV (satellite) choices back. All in all I think my electronics are not too extravagant (total for TV/phone/ISP is 110.00 per month) if I cut out tv completely the bill would be about 50 (for just phone and ISP). I don't use any money for entertainment except for TV.

[AfraidOfBK]

I was in your EXACT spot....it finally became too much - i increased the min pmts beyond the surplus in my budget that i was using to pay them....now we stopped paying the mortgage (cuz we dont want the house) so we have some extra funds to use...BUT through all of this we canceled cable services (not internet, as its necessary for work) but i have heard that sometimes that is a suggestion...when you think of the necessities, tv is really not live or die, u know?

R U keeping your home? If not, missing the pmts mightbe worth thinking about...we are trying to stay here rent free for as long as possible while we stock up on needed items with the extra money.

[Kansas1960]

And if you cut out cable and get your expenses too low then you risk not being able to have enough expenses to do a chapter 7. I read in another post a while back that said bankruptcy does not reward the frugal. So I keep charging the basics up to what I pay each month for the minimum and the interest keeps pushing my balance higher. My current plan is to continue until 6 months before filing and then stop paying.

[StartingOver08]

Be careful! You can not charge on the accounts for at least 90 days before filing!

One of the criteria that the Trustee's use to determine abuse is charging on your cc's within 90 days of filing. Another criteria is doing a balance transfer or cash advance within 70 days of filing. The reasoning behind this is the "presumption of abuse" because you charged when you knew you were insolvent. The cc company can challenge the amounts and make the amounts charged NOT dischargable in bankruptcy or, even worse, your bankruptcy can be dismissed!

When you meet with your attorney one of the first things he/she is going to say is 'Stop Charging". You must have a miniumum of 90 days from the last charge before you file.

There are other triggers for abuse, but the charging, balance transfers and cash advances are the most common. Other triggers are transferring assets to friends or family members.

Make sure to read this site and put in "presumption of abuse" in the search area.

[Rumpole]

starting,

I thought that their were only problems with charging "luxury" items, is that incorrect? So is it any charge?

Because I am well below the median for my state. But I would like to keep my home and car.

[StartingOver08]

Luxury items are a whole 'nuther catagory!

The presumption of abuse is for any charge within the 90 days. Now, we need to use a little common sense here, if you charged your phone bill 89 days ago and nothing since, it probably will not be an issue. But if you are charging your phone bill each and every month within the last 90 days - at a miniumum that debt will not be discharged and at a maximum you could be forced into a Ch 13 or worse the entire BK could be dismissed.

Read some of the posts about presumption of abuse. Onacliff is going thru something right now and it is extremely difficult.

That is why you came here, right? To find out how to best plan your BK so you don't accidentally do something against the 'rules' and hurt your potential discharge.

[Kansas1960]

In my case I have been charging the basics for months and usually going slightly higher but lately less than what I have been paying on the minimum of each card. When I stop this madness and stop paying I plan to wait 6 months before filing and no cc useage. Would I then be safe from presumption of abuse since I did not use cards for 6 months? Or, would I have to stop charging and continue to pay minimums for 3 months without any further charges. I cannot pay the minimums without charging basics. If I could do this then it would prove I don't need to do a chapter 7. What are your thoughts?

[relief13035]

Bottomline = you need to STOP charging or risk your BK being dismissed.

[Kansas1960]

To relief

i see you post about stop charging now or risk being dismissed. I don't think that was inteded for my post since your reply was being sent same time I was typing my question. I am interested in your thoughts about my situation. If anyone else also has an opinion let me know. If I stop charging now it would be hard to wait until December to file. I want to wait since I have a BT in September of last year and a few charges I would prefer not to have to respond to.

[OhioFiler]

In my case I have been charging the basics for months and usually going slightly higher but lately less than what I have been paying on the minimum of each card. When I stop this madness and stop paying I plan to wait 6 months before filing and no cc useage. Would I then be safe from presumption of abuse since I did not use cards for 6 months? Or, would I have to stop charging and continue to pay minimums for 3 months without any further charges. I cannot pay the minimums without charging basics. If I could do this then it would prove I don't need to do a chapter 7. What are your thoughts?

You're throwing good money at bad debt. If you're paying more in minimum payments than you're charging on the cards each month you're wasting money. There are plenty of posters on here who can advise you on how to deal with the collectors while you bide your time waiting to file. Stop sending your hard earned money to the banks.

[Brighterdays]

Here is some useful info on how to stay in your house as long as you can before giving it up.

http://www.consumerwarningnetwork.com/2009/02/26/produce-the-note-buys-homeowners-time/

http://consumerwarningnetwork.com/

[Kansas1960]

ok, I think you may have a point. But do I need to pay the bill after I have charged or can I stop now eventhough I have charged since last payment?