Trying to Save a CC

[backtoschool]

ditto....and actually i'm really wondering why one that is a credit councilor is even giving advise ...while it may be your job, as my was a paralegal...i give NO legal advise ONLY LIFE experience responses. the fact you have to recheck an answer does really not sit well for me. and, i'm certain you only have the best intentions....it's just you have not lived this.

lauriem....most all of here, welcome advise and insight for those that have experienced what this situation brings from the inside out...NOT from the outside in.

it may surprise you to know how many people on this site are lawyers and many well educated and informed persons from all walks of life, that not only have the expertise in this field but personally have lived it themselves.

it's always easier looking from the outside in...or is it?

I agree Tobee43 that LaurieM meant well, but she was not looking at the whole picture. No trustee is going to allow a filer to throw money at a preferred creditor and then claim insolvency. It is not fair to the other creditors and it would be seen as an abuse of the system. Best case scenario, the money would be recovered from the creditor by the trustee (and that would certainly cause the creditor to close the account). Worst case scenario, the case could get dismissed for bad faith.

Being a credit counselor does not really matter to what happens once you file bk. Credit counseling and dealing with a trustee, and the US trustee are two very different things. Drawing attention to oneself by putting up red flags for the trustee, and trying to game the system are not good plans if you want to have a successful chapter 7.

[tobee43]

As a newbie to the forum, I would take your own advice.

The trustee can do what he wants with the assets of the estate until the case is closed. Cash is an asset. Perhaps you didn't phrase the OP's case to the attorney correctly? Filing is a snapshot, but a case can still be dismissed for totality of circumstances, for undeclared assets, and for other reasons. Making large payments to creditors would certainly be a red flag. In any case, the payment would not make sense since the card would most likely be closed any way.

Nothing is as cut and dry as you are making it in a bk case, and the trustee has control of all assets and liabilities until the case is discharged and closed.

ditto....and actually i'm really wondering why one that is a credit councilor is even giving advise ...while it may be your job, as my was a paralegal...i give NO legal advise ONLY LIFE experience responses. the fact you have to recheck an answer does really not sit well for me. and, i'm certain you only have the best intentions....it's just you have not lived this.

lauriem....most all of here, welcome advise and insight for those that have experienced what this situation brings from the inside out...NOT from the outside in.

it may surprise you to know how many people on this site are lawyers and many well educated and informed persons from all walks of life, that not only have the expertise in this field but personally have lived it themselves.

it's always easier looking from the outside in...or is it?

[scorpion35]

if you continue to pay an unsecured creditor after you file your trustee will go after the money....it's called preferential payments....which is extremely frown upon by the trustees, and will neither look good for the debtor in the eyes of the trustee or any court...this is absolutely NOT in the best interest of anyone that has filed...for whatever reason...not even your most important doctor.

i agree .paying credit cards that were discharged is pointless .and the trustee does not like it one bit

[tobee43]

It is a total waste of money... agreed 100 %. It defeats the entire purpose of filing bankruptcy, but it is NOT against any rule to decide of your own free will to carry on paying on an unsecured debt "post filing" (not talking about reaffirming here... just making a decision to continue to pay for whatever reason or motivation). A good example of this would be to continue to pay medical bills which were listed in your bankruptcy petition for a doctor with whom you value your ongoing relationship.

if you continue to pay an unsecured creditor after you file your trustee will go after the money....it's called preferential payments....which is extremely frown upon by the trustees, and will neither look good for the debtor in the eyes of the trustee or any court...this is absolutely NOT in the best interest of anyone that has filed...for whatever reason...not even your most important doctor.

[tobee43]

my 0 balance MACY's and FINGERHUT's credit cards have survived my BK so far my MACY's credit line went from $400 to $100 but its still open

that is extremely rare...we had more cc's with zero balances than we did that we owed and within 1 month of our discharged they were ALL closed by the companies.
you may be lucky enough to slip by..i really hope you do!

[tobee43]

I am not understanding your confusion LaurieM. You cannot choose which creditors to pay if you file bankruptcy. That is a decision for the trustee. The trustee makes all financial decisions for you regarding assets and credit while your case is open. If you reaffirm your debt and do not discharge it and enter a formal reaffirmation agreement, that is another matter, but that has to be approved by the trustee.

exactly....??? there is no choice. ditto...the trustee makes all the decisions one does not pick and chose....

[scorpion35]

I agree. The majority of credit cards do not survive filing bk, even if they have a perfect payment history and zero balance.

my 0 balance MACY's and FINGERHUT's credit cards have survived my BK so far my MACY's credit line went from $400 to $100 but its still open

[backtoschool]

Ha, I guess my move wasn't too dumb.

I paid off two small CCs prior to filing ($300 balance each), didn't include them in my schedules and a few days post filing, charged back what I previously paid off. They can (and probably will) still close the accounts but the reporting of an IIB-notation is now practically impossible. Otherwise, they would be reporting a balance AND an IIB-notation. As we all now, a big "No, no". Or they only report IIB and $0 balance. Practically impossible as well because that would mean they can't collect what I just charged on the accounts. I mean, if it was IIB, how can I still owe on the account?

Hahaha...that's what I call "credit reporting insurance"..

This is actually a good idea for avoiding the IIB notation. But don't be surprised if you end up with an erroneous IIB notation that you have to dispute anyway.

[backtoschool]

Going to throw in a new and different question not on the topic of the ongoing conversation, so please forgive me!

Like everyone else, I have officially stopped paying on my CCs as not only stated here but as per my attorney. This, however, (and this may really be stupid but this really, truly is all new to me) does NOT include my car loan, correct? I just made another payment, and I have no desire to stop my payments. We're talking strictly CCs, correct?

And I fully agree, talk to an attorney if possible, but it's 1:30am, and I'm up and just thinking.

You should stay current with your car. The car is a secured debt and they can apply for a relief of stay and repossess the car if you get behind in payments.

[drowning123]

It's good to be current with your car if you want to keep it.

[pikaroth]

Going to throw in a new and different question not on the topic of the ongoing conversation, so please forgive me!

Like everyone else, I have officially stopped paying on my CCs as not only stated here but as per my attorney. This, however, (and this may really be stupid but this really, truly is all new to me) does NOT include my car loan, correct? I just made another payment, and I have no desire to stop my payments. We're talking strictly CCs, correct?

And I fully agree, talk to an attorney if possible, but it's 1:30am, and I'm up and just thinking.

[IBroke]

Ha, I guess my move wasn't too dumb.

I paid off two small CCs prior to filing ($300 balance each), didn't include them in my schedules and a few days post filing, charged back what I previously paid off. They can (and probably will) still close the accounts but the reporting of an IIB-notation is now practically impossible. Otherwise, they would be reporting a balance AND an IIB-notation. As we all now, a big "No, no". Or they only report IIB and $0 balance. Practically impossible as well because that would mean they can't collect what I just charged on the accounts. I mean, if it was IIB, how can I still owe on the account?

Hahaha...that's what I call "credit reporting insurance"..

[backtoschool]

It is a total waste of money... agreed 100 %. It defeats the entire purpose of filing bankruptcy, but it is NOT against any rule to decide of your own free will to carry on paying on an unsecured debt "post filing" (not talking about reaffirming here... just making a decision to continue to pay for whatever reason or motivation). A good example of this would be to continue to pay medical bills which were listed in your bankruptcy petition for a doctor with whom you value your ongoing relationship.

I agree. I think that we are just confusing the semantics of the original question. If the payments are too high however, the trustee, may take them over. That is a risk.

[LaurieM]

It is a total waste of money... agreed 100 %. It defeats the entire purpose of filing bankruptcy, but it is NOT against any rule to decide of your own free will to carry on paying on an unsecured debt "post filing" (not talking about reaffirming here... just making a decision to continue to pay for whatever reason or motivation). A good example of this would be to continue to pay medical bills which were listed in your bankruptcy petition for a doctor with whom you value your ongoing relationship.

[backtoschool]

I just double-checked with the bankruptcy attorney for whom I do petition preparation - payments made to anyone POST filing are irrelevant. This is what frightens me about this forum. Please, please people... see a professional when you ask questions and you get conflicting answers on this forum or answers that just plain don't make sense.

As a newbie to the forum, I would take your own advice.

The trustee can do what he wants with the assets of the estate until the case is closed. Cash is an asset. Perhaps you didn't phrase the OP's case to the attorney correctly? Filing is a snapshot, but a case can still be dismissed for totality of circumstances, for undeclared assets, and for other reasons. Making large payments to creditors would certainly be a red flag. In any case, the payment would not make sense since the card would most likely be closed any way.

Nothing is as cut and dry as you are making it in a bk case, and the trustee has control of all assets and liabilities until the case is discharged and closed.