What rights , if any, does someone have the moment they file?

[shipo]

yes you can use credit without getting fleeced ... if you can pay it off. For people that cant - the 'revolvers' , the offer of credit is often increased getting them more and more into debt. Such predatory practices are common place since the creditors have the courts and debt collection system at the ready to put them into servitude via default judgements, liens, etc all we talked about before.

In my case, I got my first credit card 41 years ago; over that time I have spent well over a million dollars on them, possibly two or three million, and yet I have never even once had a credit card company increase my credit limit without me asking.

[justbroke]

I don't think that offering and extending credit is predatory. There are "some" creditors that could be called predatory, payday loans specifically, but generally credit is not predatory. Any person can reduce their credit limit with a simple call (I did it once).

The problem I think is consumption and everyone trying to Keep Up With The Jonses. Generally, those of us in the Americas are extraordinary consumers. I know when I was younger I always said "if I make more, then I'll just save it." Instead I ended up spending more (and it's not due to inflation or rises in pricing). It's simply that I wanted to do everything that I wanted to do. If I stayed home, kept the first house that I had built, and didn't waste money on stupid things (I did stupid things including gambling), I'd have $1,500,000 to $2,000,000 in cash reserves (or more if I invested appropriately).

Rather than blame the system, I blame consumers. The fact that creditors have to go to the courts to collect what is due them, is not the problem of the creditor... which brings us right back to the topic. What rights does a consumer have when they file? For bankruptcy the debtor gets extraordinary rights (the automatic stay, a debtor-friendly court system, and the teeth in the permanent discharge injunction).

We keep talking about debtor rights, but creditors have rights as well.

[bornfree2]

yes you can use credit without getting fleeced ... if you can pay it off. For people that cant - the 'revolvers' , the offer of credit is often increased getting them more and more into debt. Such predatory practices are common place since the creditors have the courts and debt collection system at the ready to put them into servitude via default judgements, liens, etc all we talked about before.

In addition, using credit binds you to the surveillance capitalism behind it. Your use becomes a product they sell and resell without any regulation. So a lot comes into play when you do a deal with the devil. Its not just 'be a good wise boy and pay off your debts and no problemo'. From what i sense from a lot of people, their privacy is no longer important to them. Boy will they be in surprise when the social credit system kicks in as it has for the past 6-7 years in china and other countries. Too many swipes of that uber pizza order and your health insurance premiums go up..reference: from a movie done in 2006 predicting what we are living in today https://youtu.be/f94EysEzhg0?t=4812

Anyways we are off topic and I respect you and this forum so once again 'it is what it is'

[shipo]

You can opt out of borrowing to avoid usury , but you cant so easily opt out of the credit system that so much of daily living depends on. A credit rating is necessary for renting, utility services, job applications, etc. Yes its possible to do those things or do alternate things, but its much harder and restrictive. The argument is a bit similar to those that say flying or driving is not a right, therefore you must follow xyz mask/vaccine mandates or following xyz licensing/registration protocols and if you dont, well walk, bike, bus, hitchhike, etc.

Usury and debt is a cancer and poison to our civil liberties. I pray we return to sound money and chase out the money changers.

But as if matured in my understanding of 'da system', i return to "it is what it is" to maintain my sanity

Your posts keep leaving me with a sense you have a really skewed sense of how money, credit, and the laws governing such work here in the United States. Like it or don't, believe it or not, we have arguably the best and most fair system in the world; is it perfect? No. But like I said, it is arguably the best.

As for avoiding "usury", unless you use the word strictly from the perspective of the Catholic church from roughly 1,000 years ago, I get the feeling you don't understand that concept as well. Having a credit card which charges does not qualify as "usury", the interest is simply covers the cost of doing business as well as the making of a reasonable profit. Think about it, let's say you had a spare $10,000; would you lend it for no interest (both knowing you're at risk of never seeing that money again AND you'll be losing money everyday the loan is outstanding) or would you invest it; somewhere so it could pay you a return? I rather doubt you'd lend that money interest free.

With the above in mind, if you were willing to lend it, you'd need to figure out how much interest you'd need to charge to at least cover any money you'd otherwise gain from investing it, AND enough to cover any portions of the loan which is defaulted on.

Long story short, you borrowed a bunch of money and are now in a bind; you have two options, pay it back, or live with the consequences of not paying it back (i.e. bankruptcy and/or judgements and liens); take your choice.

[justbroke]

You can actually have and maintain credit... without actually borrowing. Many people have credit cards, but don't use them as a crutch. They use them as a tool and pay them off each month. That way they maintain the "rating" in the credit system, without relying on credit to supplement their income. That is what I mean by you don't have to "use" credit.

Even if you had a credit card with a ridiculous 29.99% APR, the doesn't mean you have to carry a balance. Keep a score above 800 and you'll get credit on the best terms when you actually need to "use" the credit.

That's what I meant by my statement that no one has to "use" credit and therefore pay interest. There are many of us with charge cards (American Express) and even revolvers that we don't carry a balance, ever. I love my American Express charge card because it keeps me honest about my ability to pay while simultaneously showing the other creditors that I'm an acceptable risk and deserve the best credit terms.

[bornfree2]

In the end, no one has to use credit and therefore one one must pay interest. .

You can opt out of borrowing to avoid usury , but you cant so easily opt out of the credit system that so much of daily living depends on. A credit rating is necessary for renting, utility services, job applications, etc. Yes its possible to do those things or do alternate things, but its much harder and restrictive. The argument is a bit similar to those that say flying or driving is not a right, therefore you must follow xyz mask/vaccine mandates or following xyz licensing/registration protocols and if you dont, well walk, bike, bus, hitchhike, etc.

Usury and debt is a cancer and poison to our civil liberties. I pray we return to sound money and chase out the money changers.

But as if matured in my understanding of 'da system', i return to "it is what it is" to maintain my sanity

[justbroke]

In your example, creditors have been paid the $100 over and over and over and over in interest.... and yet the still demand more.

You know why they charge interest, correct? If not, they charge interest because there are those that don't or can't pay. So if I loan 10 people $100, it is likely that 17-23% of them won't pay me back. To recoup that, I must charge the other 7-8 people a higher percentage to cover those that don't or won't pay me back. Other than family and friends, I don't know of anyone that loans money for free. This is because it's a risk that you won't get paid back (e.g. bankruptcy, insolvency, refusal to repay). Compound this with the cost to recover, lawsuits that are 2:1 against you winning and recovering, this makes interest even higher.

FYI, if I loan you $100 and give you 12 months to pay at even 20% interest, you'll pay only $11.16 total interest. If you borrow from a friend, you'll easily say "loan me $100 and I'll give you back $125 next month." That's like 300% interest, but we don't complain about that. I suppose it's better than a loan shark.

Yes we are debt based society, but its start to crumble. And it doesnt have to be this way...nor was it in the beginning. Bring back uninflatable sound money like gold/silver and the debt will vanish over night. And the rich fat creditors wont be harmed one bit...they just will have to start to work and compete producing real value, not paper claims

It's too late for a $23T economy and a credit-based system. Inflation isn't a new thing. Inflation happens and has happened even in the time of the Romans.

Because risk is factored into lending, it is because a creditor knows in advance that there will be losses with some debtors. The creditor/bank leverages the fact that the paying debtors will cover the losses. Think about 2020-2021 and the economy and creditors writing off losses. Everyone from landlords to your local town suffered from loss in revenues and no one paying. I agree that the risks assigned to some credit profiles is extreme.

I think interest rates over 15% are "high" but quite common, specially when considering risks. I was approved for an unsecured signature loan of $50K, 60 months, at 9.49% which is the lowest rate at my bank. If my score was not 740+, I could be paying as much as 24-27.99% for the same loan. Risk, risk, risk. I would say that I'm not a bad risk, but I did file bankruptcy.

In the end, no one has to use credit and therefore one one must pay interest. I pay interest for the opportunity to use money that's not my money... based solely on my promise to pay. It's more difficult, but there are many people who live on cash and don't leverage their future income for something today.

[bornfree2]

You make a lot of good points as usual. Honestly, you should consider becoming a judge.

I don't understand this at all. If you borrow $100 from me and you don't pay, I'm going to invoke the law to make you pay me. If there were no laws to protect the creditor then no one would ever loan money to anyone but family. Alas, family is among the worst group of debtors as they tend to never pay back their family member so... no lending.

What incentive? Lawyers charge for the time worked. They must account for their time and in most lawsuits, must provide an application for fees and show, through their time-keeping records -- which are electronic these days -- the time spent on the case. These are the professional standards. As an attorney, you can't just make up a number when it comes to a judgement.

In your example, creditors have been paid the $100 over and over and over and over in interest.... and yet the still demand more. Yes we are debt based society, but its start to crumble. And it doesnt have to be this way...nor was it in the beginning. Bring back uninflatable sound money like gold/silver and the debt will vanish over night. And the rich fat creditors wont be harmed one bit...they just will have to start to work and compete producing real value, not paper claims

[justbroke]

In the words of one of my favorite attorneys... Jan Schlichtmann from Boston:

The odds of a plaintiff's lawyer winning in civil court are two to one against. Think about that for a second. Your odds of surviving a game of Russian roulette are better than winning a case at trial. 12 times better. So why does anyone do it? They don't. They settle. Out of the 780,000, only 12,000 or 1 1/2 percent ever reach a verdict. The whole idea of lawsuits is to settle, to compel the other side to settle. And you do that by spending more money than you should, which forces them to spend more money than they should, and whoever comes to their senses first loses. Trials are a corruption of the entire process and only fools who have something to prove end up ensnared in them. Now when I say prove, I don't mean about the case, I mean about themselves.

[justbroke]

Yeah being a judgement debtor appears to be the worst possible outcome.

A judgement, as well as a judgement lien, is renewable one additional time (in most jurisdictions). That means that most judgements can be renewed after the initial 10 years, for 10 more years.

I dont understand still how bankruptcy cleans that up... i think it requires a lot lawyer work to dismantle the face sucking spider (Aliens movie).

• Rule 1: All liens survive bankruptcy.
• Rule 2: When in doubt, see Rule #1

That's the standard. Security through a lien has been jurisprudence for 100s of years. Most States enacted them in the 1800s, but English common law prevailed before then. A lien is a way to guarantee payment. I won't lend you $300,000 to purchase a home without a mortgage, which is a type of lien.

Bankruptcy does provide a way to remove liens where they a.) impair a statutory exemption, b.) questions on the perfection of the lien, c.) and other cause.

In the end, a lien guarantees payment. But it doesn't really guarantee payment. The creditor hopes the lien will be satisfied (the debt paid), but there are many cases where liens aren't worth the paper that they are written on (e.g. foreclosure, bankruptcy, casualty, insolvent debtor, collection-proof debtor).

Ugh, what an ugly side of American 'justice'...preying on the ignorance, fear, and defensiveness of the average worker.

I don't understand this at all. If you borrow $100 from me and you don't pay, I'm going to invoke the law to make you pay me. If there were no laws to protect the creditor then no one would ever loan money to anyone but family. Alas, family is among the worst group of debtors as they tend to never pay back their family member so... no lending.

I was reading the local bankruptcy rules (as well as local court civil ones) and there is SO much in there gives incentives to lawyers for winning 'awards' for default judgements. Awards, fees, etc...its all set up so that litigation occurs not for justice or truth seeking, but for outrageous, extortion lawsuits.

What incentive? Lawyers charge for the time worked. They must account for their time and in most lawsuits, must provide an application for fees and show, through their time-keeping records -- which are electronic these days -- the time spent on the case. These are the professional standards. As an attorney, you can't just make up a number when it comes to a judgement. (There are fees and costs for prosecuting a case as well. PACER costs $$$, so does tools like Westlaw and other research tools which are expensive to use. The tools are expensive, but do reduce the time spent looking in the books, thereby reducing costs overall.)

For a settlement, however, it's up to the person to accept a settlement or go to trial. The settlement is "usually" based on the cost to litigate to verdict with some sort of discount. For example, pay me $5,000 to settle or we go to trial and you'll spend $10,000 defending yourself and may still lose.

Im really really praying bankruptcy court is still fair to the average joe looking for a new start in life.

Bankruptcy was designed for a person deserving of an immediate discharge of their responsibility to pay their debts. It's a tool for those deserving a fresh start... not for those wanting a head start.

[bornfree2]

If you have a judgment creditor, your rights with property outside of bankruptcy are far less than post-petition bankruptcy. The judgment creditor can put a lien on real estate, prevent you from selling or buying real estate without satisfying the judgment, seize all the funds in your bank account or cash register via the sheriff with no notice to you, seize a part of your paycheck, and cause considerable delays (6 months or more) to returning your levied funds if determined to be exempt. If you are at a debtor's exam, opposing counsel can request to see the contents of your wallet and seize the cash with the assistance of court deputies. If you don't show up for a debtor's exam or don't otherwise cooperate, you can lose your freedom by being thrown in jail for contempt of court.

Yeah being a judgement debtor appears to be the worst possible outcome. You become their b*tch for a decade and they can stain your future property/income with their cancerous tentacles of lien. I dont understand still how bankruptcy cleans that up... i think it requires a lot lawyer work to dismantle the face sucking spider (Aliens movie). Ugh, what an ugly side of American 'justice'...preying on the ignorance, fear, and defensiveness of the average worker.

I was reading the local bankruptcy rules (as well as local court civil ones) and there is SO much in there gives incentives to lawyers for winning 'awards' for default judgements. Awards, fees, etc...its all set up so that litigation occurs not for justice or truth seeking, but for outrageous, extortion lawsuits.

Im really really praying bankruptcy court is still fair to the average joe looking for a new start in life.

[flashoflight]

If you have a judgment creditor, your rights with property outside of bankruptcy are far less than post-petition bankruptcy. The judgment creditor can put a lien on real estate, prevent you from selling or buying real estate without satisfying the judgment, seize all the funds in your bank account or cash register via the sheriff with no notice to you, seize a part of your paycheck, and cause considerable delays (6 months or more) to returning your levied funds if determined to be exempt. If you are at a debtor's exam, opposing counsel can request to see the contents of your wallet and seize the cash with the assistance of court deputies. If you don't show up for a debtor's exam or don't otherwise cooperate, you can lose your freedom by being thrown in jail for contempt of court.

With a properly prepared bankruptcy petition by your lawyer, you will be able to protect quite a bit of property in California via exemptions even though it is part of the bankruptcy estate. For all intents and purposes, all of your exempt property is yours the whole time with no way for the judgment creditor to take it from you anymore although the trustee doesn't have to agree with your exemption claim. However, non-exempt property is vulnerable to forced liquidation in a CH7 or buyback in CH7/CH13. In California, you can keep your house, retirement, some cash, and cars while leaving the unsecured creditors high and dry. My California bankruptcy was old enough that I had to make sure there was nothing left in my checking account on the day of filing. Now I can keep a small amount in the checking account if I filed a new case. In the worst states for BK, you keep just the retirement and everything else is subject to liquidation for the creditors.

[justbroke]

Its an interesting dynamic at play. Its like the Trustee and Debtor are advisories (since Trustee is looking to liquidate to pay creditors) and also 'friends'.

The Trustee is appointed the represent the creditors. While a Chapter 13 Trustee's relationship with the debtor is more symbiotic, the Chapter 7 Trustee is trying to find things to liquidate (sell, claw back) in order to get money for the creditors while earning a commission for themself.

Simply, I wouldn't call the Chapter 7 Trustee a friend of the debtor at all -- it's an exclusively advisorial relationship. A Chapter 13 is different and the Chapter 13 Trustee will say that they are not successful unless the debtor is successful.

Trustee has incentive to get top value (within practical reasons) so they can score their commissions. And if they get top value, they must compensate you via the value of your exemption. So Debtor best interest to exempt as much as possible and at a highest value so they get that amount in compensation.

Their commissions are on a sliding scale; they make 10% under $5K and then the commission goes down over certain amounts. Yes, the debtor wants to exempt as much property from being liquidated, while the Chapter 7 Trustee is trying to find as much stuff for the creditors. The Chapter 7 Trustee has a fiduciary responsibility to the creditors as they represent them all.

So trustee seeks to get commission, debtor seeks to assert rights to exemptions, and creditors get what they get after the trustee gets theirs. Im sure debtor is on the bottom of that pyramid but thats how it seems to stack up

Not quite. Chapter 7 Trustee seeks to make sure the debtor's non-exempt (and partially-exempt) property is used to pay the creditors a dividend. That's why it's called a liquidation. The Chapter 7 Trustee is the one selling (liquidating) the property in a fire-sale in order to get the unsecured creditors something.

And the Trustee also has ultimate power to just f u off by recommending a dismissal. Lol. I cant wait till this over.

Ummmm.... Trustees are over-ridden by the court more times than one may thing. They don't have as much power as many think they do. They use the power of the court to do most things (they must actually seek an order of the court just like anyone else). The (Chapter 7 Panel) Trustee's aren't usually the ones that go for a dismissal... it's the Office of the United States Trustee (UST). The UST is responsible for overseeing the integrity of the bankruptcy program and is the office that hires (appoints) trustees. While the UST has some statutory powers, they leverage the Office of the Attorney General and use US Attorneys to prosecute bankruptcy fraud.

[bornfree2]

If property is partially exempt. For example, you own a car free-and-clear and it's worth $10,000. However you only have a $4,000 exemption so the vehicle is only partially exempt. The trustee can -- and will -- sell the vehicle and then give you $4,000. So long as the Trustee gives you the value of the exemption, they can liquidate.

A smart trustee won't try to liquidate something where they can't get the value. A couple of them thought they could make money on something and ended up losing money because they still had to give the debtor the exemption value.

Its an interesting dynamic at play. Its like the Trustee and Debtor are adversaries (since Trustee is looking to liquidate to pay creditors) and also 'friends'. Trustee has incentive to get top value (within practical reasons) so they can score their commissions. And if they get top value, they must compensate you via the value of your exemption. So Debtor best interest to exempt as much as possible and at a highest value so they get that amount in compensation.

So trustee seeks to get commission, debtor seeks to assert rights to exemptions, and creditors get what they get after the trustee gets theirs. Im sure debtor is on the bottom of that pyramid but thats how it seems to stack up (well yeah the Debtor is branded with scarlet BK letter for 10 years!)

And the Trustee also has ultimate power to just f u off by recommending a dismissal. Lol. I cant wait till this over.

[justbroke]

Okay, ill just have to keep super diligent about every single expense post filing.

Not required. You are allowed to live. You are allowed to pay your rent, eat, buy food, fix you car, buy gas, keep your lights on. You just can't sell (or liquidate) something that is obviously property of the bankruptcy estate, and usually that's physical property, but can be non-exempt cash. Outside perhaps a 401(k) or other retirement account, most people that enter bankruptcy usually don't have that much cash and they depend on post-filing income. For a Chapter 7, post-filing income is not an issue so that's why we don't think of these things.

So long as the money you're using would otherwise be exempt, it's not an issue. If you filed on your own and claimed the wrong exemption and didn't protect the cash, the trustee will come looking for the money. This is why I tell everyone that has assets -- which includes cash on hand in in banks -- should file with an attorney. Too many Pro Se filers have made errors in their claim of exemptions and are shocked when they learn that the car, cash, or even home was not protected.

I dont plan on buying a new car (its unbelievable how much they cost), just want to stay housed, get income, and get my fresh start. Never will i apply for a credit card ... im sure everyone says that lol but after living in absolute austerity for 5 years, im pretty good at living on beans and rice.

A post-discharge life can be interesting. We all hope we learned something from when we were insolvent and hope to never revisit those habits which caused our downfall.