cash advances

[new2bk]

Hi,

I been reading the threads and I have some similarities with some of you. I have unsecured debt of 100K and my husband for 30k. Most of my transactions were cash advances. Made out to help my mom on her surgery and some on paying our bills. No insurance back home to cover her. On my bank statement it is categorized as purchases. Some of the accounts were already in collections and some are still with the creditors. I had the last cash advance in june of this year. I plan on filing for a ch 7 but the atty says its better for ch 13 eventhough we qualify for a 7 on the means test. He said we might have objections on the case.Let the objection period pass and then convert to a 7. Got a house without a lien and that is my only worry. Its below the homestead exemption in my state but I am still worried that the trustee might question that. Other house was short saled and before we close we end up buying the new one with a loan from a relative. Atty says that we are going to list my relative who lend us the money to buy the house as my creditor. Its not a big deal he said since I can pay him back after conversion which he said might take 6 mos. No other asset to declare and just worried about the house that we are in right now. Have not started paying my relative on the loan which is a good thing says the atty i'm planning on hiring. Any input will help....thanks

[HHM]

I question the BK 13 first then convert to a 7 strategy. Why not just wait to file a 7. If your last cash advance was in June, then you are "mostly" safe to file in January. But everything else seems fine. If your home is worth less than the homestead, then it is worth less than the homestead exemption, nothing the trustee can do about.

[new2bk]

Thanks HHM, well the atty's reason is that I have mostly cash advances on my cr card and he said I did it in such a short span of time. I have no huge balance on my cr card before that since I already paid them off from home equity (previous home) in 2007. Got the family crisis in 2008. Did cash advances on cr cards and personal loans for a span of 6 mos. The atty seems sure that there will be no objection in ch 13 but he said that since we fall below the means test the trustee in ch 13 might object to the payment plan and question "how we can live on that tight budget" so he have to cram down something. I'm scared about the objection that he was saying but if they will asks for the medical receipts on where I spent the money I got all of them if the trustee will asks don't know if they usually do.

[HHM]

Get a 2nd opinion, I understand where the attorney is coming from, but I think he might be overlooking one point. To convert from 13 to 7, you must show "changed circumstances", thus, if you are eligible, now, to file chap 7 but opt for chap 13, what will have "changed" in 6 months to justify a conversion. If you are eligible to cram some items and whatnot, and the chapter 13 would be more beneficial financially, then fine.

Ultimately, the creditors have to prove intent to defraud, that is actually somewhat difficult to do. Did you make at least the minimum payments on the cards during the last 6 months? If yes, I really don't think you have much to worry about and you have a good story behind, if you haven't made minimum payments, then I think a 13 might be warranted.

[new2bk]

I did not know that you have to justify the conversion that was a good point HHM, the atty did not say that. Yes I did the minimum payments up to 8 mos and pay below the minimum after that but stop because I got letters that they are sending it to collections. Tried credit counselling to consolidate but they suggest to file a BK. I will probably get a second opinion. Thanks

[aces67]

HHM is right. We converted and you do have to prove what has changed to cause it.

I'd get another opinion if I were you.

[backtoschool]

I did not know that you have to justify the conversion that was a good point HHM, the atty did not say that. Yes I did the minimum payments up to 8 mos and pay below the minimum after that but stop because I got letters that they are sending it to collections. Tried credit counselling to consolidate but they suggest to file a BK. I will probably get a second opinion. Thanks

I think if you have a history of paying the minimum on the debt and then paying something even after you stopped paying the minimum, that you will be fine in regards to an AP with this debt as long as you are waiting six months or so from accruing it to file.

I would get a second opinion on the chap 13. It is not an automatic approval at all to change a chap 13 to a chap 7. The changes in your circumstance would have to be very clear and well documented, and will have to show significantly reduced income or significantly increased approved expenses.

[HHM]

based on what you have described, you should probably just file the chapter 7. Perhaps wait as long as reasonable before filing, but in the end, I see very little reason for you to do a chapter 13.

[liz417]

My 1st attorney wanted to put me in a ch 13 because of my $72k debt, LOTS of cash advances AND balance transfers accumalated within a year because he was "worried about objections" from the creditors. I found this site and learned I *might* qualify for a ch 7, so I pursued it and was discharged recently from a ch 7 with NO OBJECTIONS!!

P.S. I had to consult 6 more attorneys to find the good one that would listen to my case and put me in a ch 7 with an over the median income too.


Good Luck!

[JEM]

My 1st attorney wanted to put me in a ch 13 because of my $72k debt, LOTS of cash advances AND balance transfers accumalated within a year because he was "worried about objections" from the creditors. I found this site and learned I *might* qualify for a ch 7, so I pursued it and was discharged recently from a ch 7 with NO OBJECTIONS!!

P.S. I had to consult 6 more attorneys to find the good one that would listen to my case and put me in a ch 7 with an over the median income too.


Good Luck!

Does lots of balance transfers automatically mean objections from creditors?

It's been over a year (probably close to two years) since I've done a balance transfer or cash advance, BUT for awhile I was doing to "balance transfer" game to try to get balances on lower interest cards.

Your unsecured debt is pretty close to ours--I just added ours up and it might be closer to $80K

[HHM]

It is a question of "when". If the balance transfers are old (more than a year), the risk is so very low for an objection.

[Calthius]

I would think that your lawyer has legitimate concern for wanting you to go to a 13. The questions that arise are is this potential Fraud with the large cash advances and whether you had the ability to pay the amount back.

[liz417]

My original attorney was not very experience in BKs and didn't want to deal with objections from creditors if any came up, he also felt that since I was above the median, that I couldn't qualify for a ch 7 at all....

As for Fraud, no there wasn't any, just a long story and "juggling bills" from one credit card to another...that's all.

[liz417]

Does lots of balance transfers automatically mean objections from creditors? No.

It's been over a year (probably close to two years) since I've done a balance transfer or cash advance, BUT for awhile I was doing to "balance transfer" game to try to get balances on lower interest cards. Gosh, almost 2 years...you will be fine

Your unsecured debt is pretty close to ours--I just added ours up and it might be closer to $80K

You are thinking too much into this, just because the creditors objects doesn't mean that they win, they must PROVE it.

[JEM]

You are thinking too much into this, just because the creditors objects doesn't mean that they win, they must PROVE it.

I'm an overthinker...I'll admit it. Ok, that was the nice way of saying "worrier".


I'm worried we'll actually be close to the $100K mark once fees and collection costs start getting added in.
Which I fear will make us even more scrutinized. We haven't done anything "shady", just bad judgment, mixed with some bad luck when it comes to money.