Has anyone filed with very high credit card debt?

[eener]

We have about $60,000 in credit card and lines of credit debt. Along with about $15,000 in medical bills. We were advised to file chapter 13, even though we would pass the means test because our unsecured debt is very high and might look suspcious (would cause an investigation for fraud). There is no fraud, but we were told everything would be looked through with a fine tooth comb and if 1 simple mistake was made it could cause a lot of trouble.

All of the $60,000 in debt is over 2 years old, we stopped paying on all of our credit cards in August 2009. The medical bills are more recent.

Any advice you have would be great - thank you!

[backtoschool]

Many people file chapter 7 with the amount of credit card debt you have. I am not sure why you received that advice, especially since you will pass the means test. I had 100k of credit card debt when I filed.

The legal fees for Chapter 13 tend to be higher so perhaps that is why you are being pushed into one, who knows.

[daylate]

If what you say is accurate, unless your cc debt was for an around the world trip (or a brand new Maserati) right before you stopped paying, I don't think you got very good advice. And even then you could still be all right. People don't (usually) file bk with low amounts of cc debt. I'd check with a couple of attorneys for a free consult but to me it sounds like you are a candidate for a 7. Good luck.

[eener]

Thank you! This makes me feel so much better. After researching chapert 13 I was shocked at how much I wasn't told by this attorney and had no idea how we would ever be able to make it through!

[IamOld]

I'd have to echo daylate and everyone else - PLEASE PLEASE PLEASE talk to a few good experienced BK atty's - that is NOT debt that is in any way shape or form...(unfortunately) unusual!

[DAE]

I have to agree with the others and since all of use have been through, or in the middle of a BK, we are confident that the person you spoke to is wrong. However, that won't give you comfort. What will give you comfort are examples.

I filed with $50,000 in credit card debt, $7,000 in medical debt, $100,000+ in unsecured mortgage debt, etc. No where, and at no time, did I ever read or hear anything about there being a rule concerning "too much" debt for a Ch. 7 filing. I had my 341 meeting yesterday and there was not one question from the trustee about it.

The advice you are getting here is great advice. Assuming the person that gave you the advice you describe is a lawyer, remember that you MUST speak to a number of attorneys and then triangulate the correct answer. It will not be uncommon for 4 attorneys to give you 2 different answers. You then need a 5th to break the tie. This sounds like a joke, but it's not. Many of the bankruptcy attorneys out there have no clue how to practice this type of law. If you choose to use an attorney, find one that is right most of the time. (Again, sounds like a joke, but it's not). Then make sure you cross-check the advice he's giving you with the information here in this forum. And, of course, make sure you check all of his written work. The idea I'm trying to convey is that you can minimize your exposure to bad information, but you cannot eliminate it.

Fortunately for the original poster, this forum actually has some really good attorneys/non-attorneys trolling around answering questions. You will find, more often than not, that the answers you see here are more accurate than those you may be getting from an attorney. It's sad...but it's true. As one with a law degree, it pains me to say that. I have personal experience in this process with getting outrageous advice from an attorney that has been practicing BK law in my state for decades. After consulting a dozen other attorneys and this forum, I finally got comfortable with the notion that this attorney was out of his mind although he spoke a good game and was adamant he was right.

The check points you must pass thru in a Ch. 7 aren't concerned with the amount of debt, but rather the way and timing in which they were incurred. (A Ch. 7 is unlike a Ch. 13 which has a limit on the amount of unsecured debt you can have at the time of filing.)

I don't know what the average discharge is valued at, but the values you listed here certainly would not make you extraordinary.

[brokejoker]

We filed with $150,000+ in unsecured debt. About $30,000 was medical and the rest credit cards. The only "eye blink" we got was at the 341 when the trustee asked us why the credit card debt was so high. We also hadn't paid on our cards for two years and the sky-high interest (29.9%-32%), overlimit fees, and late fees had doubled the balances on the cards. We told that to the trustee and he said, "okay, thanks for explaining". The abandonment of assets was filed the same day and it was pretty much smooth sailing from there on out.

Take a deep breath and interview another attorney. Good luck!

[Resigned2BK]

Many people file chapter 7 with the amount of credit card debt you have. I am not sure why you received that advice, especially since you will pass the means test. I had 100k of credit card debt when I filed.

The legal fees for Chapter 13 tend to be higher so perhaps that is why you are being pushed into one, who knows.

Yeah, ditto. We'll be filing Ch7 to discharge over $150k of combined CC and business loan debt (most is CC). My husband used CCs to fund his business and then I ran up mine to pay for food and regular living stuff like clothes for the family until I maxed out and finally got us on food stamps. Not a single person has told us it'll be a fraud potential problem and I know my husband was concerned about that given the sum and having to shuffle debts around for years.

[frogger]

We were advised to file chapter 13, even though we would pass the means test because our unsecured debt is very high and might look suspcious (would cause an investigation for fraud). There is no fraud

Find another attorney.

[rustymich]

Not getting sued yet??It only took 8mths for me to....I was over the 60k thats not unusual

We have about $60,000 in credit card and lines of credit debt. Along with about $15,000 in medical bills. We were advised to file chapter 13, even though we would pass the means test because our unsecured debt is very high and might look suspcious (would cause an investigation for fraud). There is no fraud, but we were told everything would be looked through with a fine tooth comb and if 1 simple mistake was made it could cause a lot of trouble.

All of the $60,000 in debt is over 2 years old, we stopped paying on all of our credit cards in August 2009. The medical bills are more recent.

Any advice you have would be great - thank you!

[tobee43]

frogger right, get another atty.

we couldn't believe how many atty's attempted to have us go for a chapter 13. we had lost both our upper management jobs, (along with a business), lived in our house for over 30 years were not YOUNG, so replacing our jobs was impossible and had over 200k in credit card debt which mostly were associated with medical expenses.

that was over 3 years ago, and still no jobs, i just can't image us now, had we listened to one of those atty's pushing us toward a 13. well, actually, i do, we'd have to pay another atty and convert. i'm also NOT suggesting a 13 doesn't work for many. there are numerous members on this forum whom successfully endure a 13 with no problems. i just think it depends on your personal situation and what, although, one really never truly knows what can happen in the future, but we are fairly certainly, we won't be finding jobs anytime soon.

[747LUVR]

We defaulted on about $180k in cc's and about $14k in medical bills, but those too exploded over a year, tt asked us how/why, explained it, signed a doc so they could pull some old cc statements, and that was thankfully that. total discharge of unsecured debts was a tad over $300k, but our atty's never blinked and its over with, definelty do talk to another atty. (we used $ to support my unemployed parents, then my wife lost her job, then baby came along etc etc for those who ask how it got so high)

[sunshinepa]

I did 59,000 credit cards and my current mortgage was included for 108,000. I am keeping the house though. It was never questioned. Incidently, my cards were run up helping support my son who lost his job, had no unemployment due to being a consruction self contractor. So I paid all his expenses for two years, (that was mind you in the two years before I filed) he could not even get hired at the walmart or mickey dee's. Doing better now thank goodness.

Anyway, only about 3000 of the cc's was mine, the rest supported him.........as others stated, find another lawyer!!!!!

[tobee43]

I did 59,000 credit cards and my current mortgage was included for 108,000. I am keeping the house though. It was never questioned. Incidently, my cards were run up helping support my son who lost his job, had no unemployment due to being a consruction self contractor. So I paid all his expenses for two years, (that was mind you in the two years before I filed) he could not even get hired at the walmart or mickey dee's. Doing better now thank goodness.

Anyway, only about 3000 of the cc's was mine, the rest supported him.........as others stated, find another lawyer!!!!!

those DARN kids...when will they EVER leave us??? i mean just because they don't live with us, it's a forever thing isn't it. shoot, i would have really thought about that last BIG push had i known..LOL!

but we all do it when we can, i still send them and they are both in better shape than us. actually, our son doesn't even know we filed bk. he thinks we downsized and moved because we retired. is that sad or what.

[eener]

Not getting sued yet??It only took 8mths for me to....I was over the 60k thats not unusual

We currently have 3 judgements against us, our cars are each worth less than 5k and we are underwater on our mortgage. There really isn't anything they can take, but liens were put on our house. We know they will be wiped clean in BK and we probably won't be keeping the house anyway (we won't reaffirm and will stay in the house until they foreclose).


Thank you everyone for all of your advice, we are definitely going with a different attorney.