a lot of ?'s about filing ch 7 CA

[steph1981]

Hi, I have some questions about filing a ch.7. My husband decided that sometime in the near future he will be filing due to a TON of credit card debt. I filed my own in August 2004, but it was really simple... all visa cards that had not been used in a long time and no assets. We live in California. We have a bunch of questions:

1.He purchased a computer on a Best Buy credit card in October. Will they want it back?
2.He purchased a dirtbike on a Yamaha Credit card back in July, but sold it and bought something else with the $$ instead of paying the card off. What happens now?
3.With tax return time coming soon, is he going to lose his refund to the court? 4.All of the credit cards are current in payments to this time... we are struggling to pay them, should we just stop since planning on filing the ch.7 anyhow? How long should you go without paying on the credit cards before filing?
5. If we are to stop paying on the credit cards but continue to pay things like phone and cell phone bills, does this look bad to the court?
6. We just got a truck in November and want to keep paying on it and keep it... what happens with this? The loan is for 28,000 because there is stuff like Gap coverage and extended warranty financed in with it, but the truck is only worth 21,000.
7. He has a new credit card coming in the mail and was planning taking a cash advance off of it.. what effect does this have on a future ch7? how long do you have to wait after having a cash advance to get it discharged?

I know this is a LOT of questions, but we dont have the $$ for a lawyer yet and we need to know what we should be doing and when would be the best time to file..
Thanks in advance for any answers!!

[Dawn1970]

#1) If the Best Buy account is like most typical credit cards, I don't think they will ask for the merchandise back. If you still have the terms of your credit agreement with them, read and see if it is considered a 'secured loan'. If it is, then they have the right to ask for the merchandise back.
#2) I thought you had to have a clear title to a dirt bike before you can sell it? I'm probably wrong, though. I guess they can't repo what you don't have anymore. Again, check the fine print in the credit agreement with them to see if this is considered a secured loan. Since you call it a credit card, probably not.
#3) Todd has answered this same question on a post by Manning18 on 12/02 under General Bankruptcy Talk. He said the court would not take the tax refund.
#4) Yes, definitely stop paying on the cards for at least 90 days+ before you file. This will enable you to have more cash to 'start over' with and to pay the lawyer's fee and filing fee. And if the acounts are current when you file Ch. 7, it looks as if you aren't having trouble paying them. When you file Ch. 7 you're basically saying that you have more debt than you'll ever be able to pay.
#5) No, it will not "look bad" that you still pay the phone and utilites after you cease paying the credit cards. Naturally they know that when you cannot pay all of your bills, you're going to worry about the vital necessites for your family such as electricity and a phone above all else. And actually, if you're behind on your utilites I think in most states you can list them as a creditor in your Ch 7 and they are not allowed to disconnect you until the bankruptcy is settled. Better check with your lawyer on this, though. I'm not positive about that.
#6) If the payments on your truck are current and you have proof of proper insurance for it, I don't see why you couldn't reaffirm on it and keep it. You would have to be current on it, though, and the finance company would have to agree to let you reaffirm on it.
#7) As for the credit card that's coming in the mail, break it in half and throw it away. If you do get a cash advance on it, you'll need to wait 6 months before filing your Ch. 7.

Many BK lawyers give free consults! Hope you find one and good luck.

[Dawn1970]

P.S. It will no doubt be difficult to sweat out the phone calls from your creditors when you let your accounts go delinquent but just don't talk to them. It's easy to give them that 'minimum monthly payment' just to make them shut up and go away but remember, your accounts need to be delinquent when you file. Change the phone number if you have to.

[Nozhayr]

I was told by an atty NOT to file at tax time. Once you file your taxes and get and spend the refund, THEN file. If you file BK now, your 341 will be mid to late January and the trustee will most certainly ask "are you expecting a tax refund?" If it's a good chunk of $, they may want it. I filed in Nov. 2003 and had my 341 in late December and I was asked this by the trustee. I was not expecting a tax refund (ended up paying IRS $8), so I was able to say "no".

Looks as though you have a lot of recent debt. If you are considering BK, why are you spending and getting ANOTHER CC? If you are not behind on your payments, try eliminating the cell phones and using the $ to pay off the CC's. I'm not convinced that BK is quite right for you. You don't appear to be in dire straights. Sometimes I wish I'd never filed BK7, and just tried harder to pull out of debt. Are you sure it's the only solution?

Bill