Spending on Credit Cards Before Filing

[NeedsBailout]

Hello!

This is my first post to these forums. My husband and I have just hired an attorney to handle our bankruptcy. He told us to stop paying our credit card payments (which are currently all paid to date - never been past due ever). We plan to stop paying them now because we can no longer afford to pay them.

But we have several expenses that we did plan to put on the cards such as preschool costs and other overages that we do not have the cash for. We do not plan to file bankruptcy until Jan 2009 so we are wondering for the next 30 days (before our cards become past due) can we continue to spend on the cards? Is this allowed?

The attorney mentioned not to worry about spending on the cards 6 months prior - that this would not be audited. But I'm not sure about spending on the cards so late in the game. Is this ok?

In theory the money that we are saving on the cards should help us pay for these expenses but this is not true for us. The $1000 a month we will be saving from not paying our cards is actually less than we've been putting on the cards the each month just to get by.

We are going to attempt a Chap. 7 but we are on the border and may end up with a Chap 13 in the end. Don't know if this makes a difference.

Thanks!

We are from MI by the way.

[tanya0525]

Hello!

This is my first post to these forums. My husband and I have just hired an attorney to handle our bankruptcy. He told us to stop paying our credit card payments (which are currently all paid to date - never been past due ever). We plan to stop paying them now because we can no longer afford to pay them.

But we have several expenses that we did plan to put on the cards such as preschool costs and other overages that we do not have the cash for. We do not plan to file bankruptcy until Jan 2009 so we are wondering for the next 30 days (before our cards become past due) can we continue to spend on the cards? Is this allowed?

The attorney mentioned not to worry about spending on the cards 6 months prior - that this would not be audited. But I'm not sure about spending on the cards so late in the game. Is this ok?

In theory the money that we are saving on the cards should help us pay for these expenses but this is not true for us. The $1000 a month we will be saving from not paying our cards is actually less than we've been putting on the cards the each month just to get by.

We are going to attempt a Chap. 7 but we are on the border and may end up with a Chap 13 in the end. Don't know if this makes a difference.

Thanks!

We are from MI by the way.

We were told by our attorney to not file till it has been 6 months since the last use. Also, you can't make any payments to one creditor over $700 . The longer you can wait till file, the better.

Tanya

[albacore44]

well since you already have an attourney, and know your filing BK, you should not continue charging. You could be asked under oath when you first spoke to an attourney and knew you were insolvent. The TT may not allow you to discharge any debt incurred after that date

[frogger]

You've seen an attorney, so not only do you stop paying, you stop charging! Knowing that you are going to file bk and still charging on the cards smells of fraud.

[LimpDisc]

Time to stop using credit if you've hired a BK attorney.

[DeadManCrawling]

The court may ask your attorney when you first consulted him/her.

Charges made after that date can, and most likely will be, considered fraudulent.

The idea is this: You met with a BK attorney, so you KNEW you were in trouble. Yet, you continued to charge things.

If these are relatively small amounts, the creditor probably will not bother to pursue them. However, if they add up to a decent number, you have more trouble than you would like.

Good luck in all this, either way

[AngelinaCatHub]

The court may ask your attorney when you first consulted him/her.

Charges made after that date can, and most likely will be, considered fraudulent.

The idea is this: You met with a BK attorney, so you KNEW you were in trouble. Yet, you continued to charge things.

If these are relatively small amounts, the creditor probably will not bother to pursue them. However, if they add up to a decent number, you have more trouble than you would like.

Good luck in all this, either way

Just about ready to echo the above. Do not under estimate the Federal Court. They are kind for the most part unless they pick up a hint of unwise ideas. Your idea in essence was thoughts of fraudulent activity. They, the Court, have seen all these tricks. Please do what your lawyer said and charge not a penny more. 'Hub

[NeedsBailout]

How frustrating. We talked to attorney today. My son's last preschool bill for the year of $400 has been due for a month now. We just haven't paid yet. If we can't charge how the heck to we pay the thing? I understand what you guys are saying. But this is debt we can't do anything about other than take our child out of school.....or pay the bill. Guess we should've paid the bill yesterday, the day before we talked to the lawyer!? If we pay the bill tomorrow will the courts be so specific as to call one day "fraud" on a preschool bill. Not exactly like we bought a new big screen TV.

[catleg]

If you're not filing for 6 months it doesn't necessarily mean you are committed to bankruptcy. You might just choose debt settlement instead, or hit the lottery. If you have legitimate needs I wouldn't deprive myself. Most likely no one will ever care. Maybe the worst thing that happens is you end up paying anyway. Nothing is certain in life. If you haven't stopped paying yet, it's maybe not too late for you. Once you stop paying, then it's too late, you've signalled the route you're planning to take.

[AngelinaCatHub]

How frustrating. We talked to attorney today. My son's last preschool bill for the year of $400 has been due for a month now. We just haven't paid yet. If we can't charge how the heck to we pay the thing? I understand what you guys are saying. But this is debt we can't do anything about other than take our child out of school.....or pay the bill. Guess we should've paid the bill yesterday, the day before we talked to the lawyer!? If we pay the bill tomorrow will the courts be so specific as to call one day "fraud" on a preschool bill. Not exactly like we bought a new big screen TV.

I am not saying you are doing anything dishonest. The Judge may not see it for a day. It is possible though. Here is the thing; you know you are making a payment of monies that is not yours, it belongs to the bank card. You do not have intent to pay this back as soon you are stopping card payments. You paid your lawyer good money for good advice. If you do not take it to the letter, then you threw your good money away. If you cannot pay $400 for pre school, then you cannot afford pre school. School your child yourself. Pre school is a new concept in all. Kindergarten used to be what pre school is now. Next it will be another "need" then another. What do you think got you here in the first place? Easy credit using fast money that does not belong to you, but mortgages your future and ruins you 'well being'.

Anything here on this Forum is not legal advice. It is opinion and experience. I have shared my experience here and cash is king. I have no bills to worry about, and if I cannot afford electricity, I shall buy candles. That is less stressful than racking up a thousand dollars of electricity and worrying about the bill. Do you understand where I am coming from, and that I am giving you advice that will help the stress you are under and will get worse before it gets better?

You are free to do what you wish to. There are consequences to your choices, though. 'Hub

[AngelinaCatHub]

Albacore, you have outdone yourself, Shes beautiful. 'Hub

[frogger]

if I cannot afford electricity, I shall buy candles.

You are free to do what you wish to. There are consequences to your choices, though. 'Hub

It's all about your frame of mind. 'Hub is right on track with his thinking. If you can't afford it, then you do different. Improvise........

[frogger]

albacore, you have outdone yourself, shes beautiful. 'hub

I'm just wanting to know if he's getting these pictures out of his wallet!

[forgotten]

How frustrating. We talked to attorney today. My son's last preschool bill for the year of $400 has been due for a month now. We just haven't paid yet. If we can't charge how the heck to we pay the thing? I understand what you guys are saying. But this is debt we can't do anything about other than take our child out of school.....or pay the bill. Guess we should've paid the bill yesterday, the day before we talked to the lawyer!? If we pay the bill tomorrow will the courts be so specific as to call one day "fraud" on a preschool bill. Not exactly like we bought a new big screen TV.

I am not trying to be on a high horse here. I have made some questionable decisions reguarding debt myself... but...
If you know you are going to file BK charging anything else is fraud. No way around it, it doesn't matter if its a big screen TV or a preschool bill. It is still fraud and theft. Someone may call you on it, or it may go by unnoticed.

You say you can not afford your bills even after you stop paying your unsecured debt. What is your plan after you file? There will be no more charging items. When the next preschool bill comes due you will have to pay with cash (along with everything else).

[NeedsBailout]

I am not trying to be on a high horse here. I have made some questionable decisions reguarding debt myself... but...
If you know you are going to file BK charging anything else is fraud. No way around it, it doesn't matter if its a big screen TV or a preschool bill. It is still fraud and theft. Someone may call you on it, or it may go by unnoticed.

You say you can not afford your bills even after you stop paying your unsecured debt. What is your plan after you file? There will be no more charging items. When the next preschool bill comes due you will have to pay with cash (along with everything else).

I understand. It just feels really really pathetic that my husband makes 100,000 a year - that we suffered through college thinking we were being responsible.......living the American dream, right? If you go to school - one of the TOP BUSINESS schools in the country to get your Masters degree and you pay a load for your education that the poor 4 year old shouldn't be ripped out of his preschool in the middle of the year away from all his friends AFTER you have filed bankruptcy and ruined your credit for 10 years. BUT - no - still have $216,000 in student loans that we can't pay off because wages/bonus's have been completely lacking in this economy. And not allowed to bankrupt student loans. Just really frustrated with the world. We would've been better off living on welfare with the other bums than actually trying hard and getting straight A's in college.

Just my rant - understand your "high horse" attitude and am sure I will come to terms with my poverty in the next few days. But right now it is hard to except. I have a fourth child on the way and can't wait to think about something other than this.

On top of that we paid this credit card bill $300 something dollars just 4 days ago not knowing what advice that lawyer was going to give. That could've paid for preschool.......we didn't realize the cutoff would be so immediate. So, yes, we COULD'VE afforded preschool had we not just paid this credit card that we shouldn't have paid obviously. That would've been less of a fraud?