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    Credit Card Purchases

    Could someone clarify this for me? I know the 90 day rule with credit cards. This means I should not use the cards 90 days before even meeting with the attorney, correct? Also, I'm reading forums where it says the trustee is asking questions about purchases from 12 months ago on cards. Does this actually happen and does the trustee have access to exactly what it was your purchased? I know there are going to be purchases that I don't remember a year ago offhand. I also just discovered something I've done that is likely going to rule out filing BK for me altogether. Earlier this month I had to purchase a water heater for my house and it went on my store card. I didn't have the means to pay the person fixing it for me cash so I purchased some gift cards for him to be able to use so that I was at least giving him something. There was a few months ago where I had also purchased some gift cards for myself to be able to use to pay other bills like my electric, gas, and groceries......I know, that wasn't a smart thing to do and I honestly thought about that at the time, but never for a second did I realize the impact it could have down the road. I was expecting an inheritance and was just going to pay the majority of the cards off. However, that didn't happen. Fast forward to right now, I know at least 1 of the purchases was over the $700ish mark. Are they going to know exactly what I purchased that day? What do I say if they ask me? Do I just tell them the truth, uh yeah, I purchased a hot water tank and a few gift cards to pay my buddy for fixing it? I bought gift cards so I could buy my kids food?

    I'm literally getting sick over this at the moment...the way things are looking aside from this worry, if I leave all my credit cards alone and stick to 90 days, it would put me around March 1st 2020 of filing. However, I currently have 5 cards past due. Discover, BBT, Wells Fargo, Credit One and Merrick. They are almost 2 months behind. I don't know what to do. I can't make the min payment on Discover, they want almost $400. I can't make the other payments that are behind unless I don't pay any of the ones I'm current on. By the time March comes I will be about 5 payments behind andI'm freaking out and have no idea what to do right now.

    #2
    Maybe some others will chime in here. For what it’s worth though , stop using cards, let the six month mark pass, nothing happened to me in that time, the usual late bills came. I was not asked for credit card statements, they didn’t ask for statements for the 341. I was not asked how or what expenses got me into debt. The most interesting thing was what’s currently in your bank accounts, Do you expect you receive any money. You will read in here over and over about people stressing this charge or that. Hot water heater is not a luxury item anyway.

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      #3
      My experience (Chapter 13) is similar at Layla55 I had credit cards way past 6 months late. It was not a problem. I do not recommend procrastinating like I did (to the extent of getting sued), but it was not a problem to have late/missed payments and have collections and the court pursuing payment.

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        #4
        I guess maybe I better bite the bullet and go ahead and schedule the consult with the lawyer. By the time 6 months comes it will be around May. That just seems like a long ways to wait to file. I will also have a tax return by that time but it will likely be gone. Ideally I've been told I should file before I even get it but I guess that's the reason for meeting the lawyer huh? As for luxury I know the gift cards can bite me as of how many and how much but wasnt sure if they would actually even show at the 341 to begin with.

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          #5
          If there was an issue with questionable purchases it would be the credit card companies that would take notice . That would be a reason they could show up at your 341. To dispute the discharge of specific purchases . But as you have read here they rarely show. I’d imagine it would take something really questionable like a big cash advance or vacation/ luxury right before filing.

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            #6
            Don't lose any sleep over this. It costs thousands of dollars for a creditor to file an objection to discharge, and few will bother unless the debt is huge, was incurred immediately before filing, and was clearly for luxury purchases. Routine purchases of food, fuel, medicine, even home repairs and car repairs do not rise to the level of "luxury purchases" and will not provide grounds for a creditor to have your debt ruled non-dischargeable.

            Also, since you have decided that bankruptcy is unavoidable, STOP paying all of your unsecured debts. Any money paid towards these debts is just money down the toilet at this point. You should stop using credit cards, and use your money to pay for living expenses going forward.

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              #7
              Originally posted by Layla55 View Post
              If there was an issue with questionable purchases it would be the credit card companies that would take notice . That would be a reason they could show up at your 341. To dispute the discharge of specific purchases . But as you have read here they rarely show. I’d imagine it would take something really questionable like a big cash advance or vacation/ luxury right before filing.
              Thank you for clearing this up. For some reason I was thinking the trustee went through everything and would be questioning the purchases. That is a huge relief off my shoulders

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                #8
                Originally posted by bcohen View Post
                Don't lose any sleep over this. It costs thousands of dollars for a creditor to file an objection to discharge, and few will bother unless the debt is huge, was incurred immediately before filing, and was clearly for luxury purchases. Routine purchases of food, fuel, medicine, even home repairs and car repairs do not rise to the level of "luxury purchases" and will not provide grounds for a creditor to have your debt ruled non-dischargeable.

                Also, since you have decided that bankruptcy is unavoidable, STOP paying all of your unsecured debts. Any money paid towards these debts is just money down the toilet at this point. You should stop using credit cards, and use your money to pay for living expenses going forward.
                Thank you, this makes me feel so much better. I literally have made myself sick over all this trying to figure out what to do and up late nights trying to make sense of all of it. As of today, I cut all my cards up except one that has about 150 on it, just in case of an emergency, but dont forsee that hopefully. If I'm not making the payments then I have plenty of cash to pay for every day living expenses and wont be an issue at all.
                do you have any input on tax returns? My lawyer consult said I could use the wildcard to protect it. However, waiting 6 months will put me past the tax and have it already deposited. Should I not spend any of it until I file?

                Comment


                  #9
                  Originally posted by xoxoamandajo View Post
                  do you have any input on tax returns? My lawyer consult said I could use the wildcard to protect it. However, waiting 6 months will put me past the tax and have it already deposited. Should I not spend any of it until I file?
                  If you have sufficient exemptions available to protect the tax refund, then it does not matter if the money has been received yet, or not. An anticipated tax return is treated the same as funds in a bank account for purposes of exemption. If you are able to exempt X number of dollars of "cash on hand" then you can exempt a bank account and anticipated tax refund up to X number of dollars.

                  If you do not have sufficient exemptions available to protect the tax refund, then you should wait to declare bankruptcy until after the funds have been received and spent on living expenses. If you do not do this, then your bankruptcy will become an "asset case" and you will be required to turn over the funds to the trustee. Why do that, when you could simply wait to file, and avoid this problem?

                  Comment


                    #10
                    Originally posted by bcohen View Post

                    If you have sufficient exemptions available to protect the tax refund, then it does not matter if the money has been received yet, or not. An anticipated tax return is treated the same as funds in a bank account for purposes of exemption. If you are able to exempt X number of dollars of "cash on hand" then you can exempt a bank account and anticipated tax refund up to X number of dollars.

                    If you do not have sufficient exemptions available to protect the tax refund, then you should wait to declare bankruptcy until after the funds have been received and spent on living expenses. If you do not do this, then your bankruptcy will become an "asset case" and you will be required to turn over the funds to the trustee. Why do that, when you could simply wait to file, and avoid this problem?
                    Thank you a million times!!! I know I will have sufficient exemptions to cover the tax return, so that is a huge relief. You seem to be very knowledgeable with all of this. Could you tell me why it's better to wait 6 months of no using the cards vs the 90/70 day rule they have in place? I just want to get this over with as soon as possible and move forward.

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                      #11
                      Might as well cut up the other card. Not gonna be able to save it. Unless its a prepaid debit card.

                      Comment


                        #12
                        Originally posted by spr250 View Post
                        Might as well cut up the other card. Not gonna be able to save it. Unless its a prepaid debit card.
                        Normally I would, but I'm not going to cut this one. The lawyer said it's fine to keep it so long as I don't actually use it unless there is a dire emergency that could be explained if something should happen outside the 90 days.

                        Comment


                          #13
                          I am saying to cut it up since it will probably be closed by the creditor anyways as soon as they find out about the BK.

                          Comment


                            #14
                            Originally posted by spr250 View Post
                            I am saying to cut it up since it will probably be closed by the creditor anyways as soon as they find out about the BK.
                            Right, I would but I haven't filed yet and don't plan on filing until March or so at the earliest as my 90 days just began.

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                              #15
                              Xoxo I was able to use my credit cards all the way up until around the date I filed bankruptcy. I lived off my cards. Once that case number was assigned and the credit card companies got hint I filed bankruptcy, that was it! The accounts was blocked and cards was turned off. They say not to do cash advances and those type of things. Depending on the balances on your card, if you maxed it out or whatever the case was, those creditors will not come after you especially like those bigger out of state companies: capital one, merrick, discover, bbva, or whoever. If it’s a local credit union or small town bank, then they may have a representative there at the 341 meeting to question your usage but other then that you should be fine. I had almost $20k in cc debt with multiple credit card companies that was included.

                              three questions the trustee asked along with everybody else who filed bankruptcy..

                              1. what’s your phone number
                              2. Did you sell any investment properties
                              3. is there any debt representative on my behalf (if so they would take the stand about your debt)

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