Strange Situation

[dumpinmydebt]

My wife and I are filing Chapter 7 in 2 months and I'm nervous about 1 particular thing.

Over 2 1/2 years ago, we purchased things on Paypal. My wife was expecting a large (about $5K) check to come through from commission on closing a loan. We did the stupidest thing and purchased things before the money came through. It was on a weekend, and the check was to come through on Monday. We purchased about $3K worth of things, maybe even less (one of the biggest mistakes we made. It was the first large check either of us ever received and we were just too excited to wait. I kick myself in the butt all the time over it.) Well, my wife got screwed by the company. Long story short, the company gave all the money (it was supposed to be split 50/50 since she originated the sale and got the people to go for the loan, while he simply did the paperwork) to the coworker she partnered with and there was no way she could prove it was hers and fight it. The person who received it was great friends with the owners of the company (all men.) Needless to say, that business closed about 3 months after this incident. My wife actually quit shortly afterwords, before they closed down. And that is when all of our financial problems began, since she has never been able to find a job since. It is clear to see that shortly after, we stopped paying all credit cards, and actually lost our 2nd car.

We didn't receive half the things we ordered. We don't even own anything we purchased anymore, sold everything to pay bills. But the "proof" was the delivery confirmation, which showed no signature. We were actually evicted right around that time as well. We couldn't cancel when we found out the situation because amazingly they shipped out immediately.

We received 1 notice from paypal about the incident a few months later, then never heard from them again.

We just got a letter, now saying we owe them $4K, probably with fees or something. It's not a threatening letter or anything, just a simple collection letter. My biggest fear is that we have never sent them a payment, of course this is the 1st collection letter. My fear is that when we file they will claim fraud. And I can see their point and I know I couldn't really fight it. I know it was our mistake. I don't know what to do or if I should really be worrying since it's been over 2 1/2 years.

Please don't respond and tell me how stupid it was, I already know and am hoping to get some advice on the situation.

Also, if you think it will go down that route, would it be best for me to attempt a few small payments and then stop 1 month before the BK? I could postpone my BK until August, but I think that is the latest (expecting to be sued at the end of June for skipping out on a lease we couldn't afford.)

[jlmaca]

My wife and I are filing Chapter 7 in 2 months and I'm nervous about 1 particular thing.

Over 2 1/2 years ago, we purchased things on Paypal. My wife was expecting a large (about $5K) check to come through from commission on closing a loan. We did the stupidest thing and purchased things before the money came through. It was on a weekend, and the check was to come through on Monday. We purchased about $3K worth of things, maybe even less (one of the biggest mistakes we made. It was the first large check either of us ever received and we were just too excited to wait. I kick myself in the butt all the time over it.) Well, my wife got screwed by the company. Long story short, the company gave all the money (it was supposed to be split 50/50 since she originated the sale and got the people to go for the loan, while he simply did the paperwork) to the coworker she partnered with and there was no way she could prove it was hers and fight it. The person who received it was great friends with the owners of the company (all men.) Needless to say, that business closed about 3 months after this incident. My wife actually quit shortly afterwords, before they closed down. And that is when all of our financial problems began, since she has never been able to find a job since. It is clear to see that shortly after, we stopped paying all credit cards, and actually lost our 2nd car.

We didn't receive half the things we ordered. We don't even own anything we purchased anymore, sold everything to pay bills. But the "proof" was the delivery confirmation, which showed no signature. We were actually evicted right around that time as well. We couldn't cancel when we found out the situation because amazingly they shipped out immediately.

We received 1 notice from paypal about the incident a few months later, then never heard from them again.

We just got a letter, now saying we owe them $4K, probably with fees or something. It's not a threatening letter or anything, just a simple collection letter. My biggest fear is that we have never sent them a payment, of course this is the 1st collection letter. My fear is that when we file they will claim fraud. And I can see their point and I know I couldn't really fight it. I know it was our mistake. I don't know what to do or if I should really be worrying since it's been over 2 1/2 years.

Please don't respond and tell me how stupid it was, I already know and am hoping to get some advice on the situation.

Also, if you think it will go down that route, would it be best for me to attempt a few small payments and then stop 1 month before the BK? I could postpone my BK until August, but I think that is the latest (expecting to be sued at the end of June for skipping out on a lease we couldn't afford.)

I think alot of us here have made some pretty boneheaded mistakes in life, welcome to the club. Are you going to file chapter 7 yourself or hire an attorney? This initial consult is free and you could ask that question. How is it possible to purchase things on Paypal without the money in the account? Was it a Paypal credit card?

[music12]

i don't see any fraud. you thought the $5k was coming. then it didn't come.

also, it was 2.5 years ago, and nobody can say you planned to go bk already then. also, $4k isn't a huge amount relatively speaking.

[dumpinmydebt]

We are definitely hiring an attorney. We are both in college, and I work full time, so there is no way we have time to go pro se. I will say that the one advantage from her getting the job at that crap hole is that she knows a lot about credit, which we will be able to use to our advantage after we file.

And to answer your question about how we were able to make the purchases, we had used the account a few times before and made purchases, and our checking account was verified and directly linked. It always took at least 3 business days before they would even attempt to withdraw the money from the checking account, which by that time, the money would've been sitting in the account. Our thought process was to buy the stuff over the weekend, we didn't even think anything would ship until they were officially paid. From there, we didn't receive half the stuff, since we were evicted within 2 weeks (the money was also for our rent.) And it's kinda hard to deal with Paypal as far as things not being received when you owe them money. They don't care, lol.

And yes bk was never on our mind during that time. We thought we were far from that. We are just now at the point where we have saved enough for the bk and the attorney. We have no disposable income either, according to the means test.

[jlmaca]

We are definitely hiring an attorney. We are both in college, and I work full time, so there is no way we have time to go pro se. I will say that the one advantage from her getting the job at that crap hole is that she knows a lot about credit, which we will be able to use to our advantage after we file.

And to answer your question about how we were able to make the purchases, we had used the account a few times before and made purchases, and our checking account was verified and directly linked. It always took at least 3 business days before they would even attempt to withdraw the money from the checking account, which by that time, the money would've been sitting in the account. Our thought process was to buy the stuff over the weekend, we didn't even think anything would ship until they were officially paid. From there, we didn't receive half the stuff, since we were evicted within 2 weeks (the money was also for our rent.) And it's kinda hard to deal with Paypal as far as things not being received when you owe them money. They don't care, lol.

And yes bk was never on our mind during that time. We thought we were far from that. We are just now at the point where we have saved enough for the bk and the attorney. We have no disposable income either, according to the means test.

I don't think you'll have a issue with this either. Good luck with the bk.

[JackBondLove]

So you are going to file BK over a $4K debt? That seems like a small amount to file over.

[SMinGA]

He never said this is his only debt. Also mentioned a balance owed for an apartment rental/eviction - but didn't go into details about other debts. That doesn't mean they don't have others.

So you are going to file BK over a $4K debt? That seems like a small amount to file over.

[dumpinmydebt]

So you are going to file BK over a $4K debt? That seems like a small amount to file over.

I wish that was our only debt! I'd make an arrangement and just pay it off! lol.

No, I made a spreadsheet to add our debt. Many credit cards, and yes the apartment lease, grand total of $50K. Not including student loans, which can't be discharged anyway.

I only make $28K per year (before taxes) and my wife is unemployed (not receiving unemployment), and we are both in college as well.