Paying off debts?

[concerned]

We met with our attorney a couple weeks ago, but we have not yet filed for bk. We want to pay off some debts prior to filing bk. Our attorney never advised us that we couldn't; however, we never asked. Can we pay some of our unsecured lenders off? Our intention was not to owe any credit card companies--we just wanted out of our house. Please advise!

[Genenco]

As all will tell you here, you CANNOT pay off the credit cards if the amounts exceed $600. The trustee will be looking at transaction history and will dismiss your application for fraud..

You might be better off, to call the holder of the mortgage, try and work out a deal.

[ducksinarow]

That's 600 in the last 3 months. SO if you pay someone $250.00 a month that is over $600.00

[BIGA]

I am concerned as well here

I have I guess made what was preferential treatments to one card. I needed to keep one open so I could order books (this did not happen) and the form7.com. (this did) I have exceeded 600 bucks in the last 2 payments. I am pretty sure the other cards are probably cancelled by now but I have been afraid to use them anyway. The other creditors all got something from me but next to nothing. Is this automatic grounds for dismissal? Considering how much I owe nobody is anywhere near being paid off.

[hhou812hh]

As all will tell you here, you CANNOT pay off the credit cards if the amounts exceed $600. The trustee will be looking at transaction history and will dismiss your application for fraud..

You might be better off, to call the holder of the mortgage, try and work out a deal.

I don't know if this would be fraud. If the payments were 600 or more for unsecured debt then the trustee would get the money from the cc companies that were paid and the cc companies would be pissed and probably close the accounts, but still demand that concerned pays them off unless they get listed on the petition.

Fraud is usually when some idiot abuses the system, and hides assets or transfers assets or charges up a storm just before filing with no intention of paying. The later won't cause any jail time though. Only a lifetime of debt

[BIGA]

Checking Withdrawls

What If I am going to the ATM machine on a regular basis trying to pull cash out of my checking acct. trying to get down to zero in anticipation of filing How is this viewed? Outright Fraud?

[hhou812hh]

What If I am going to the ATM machine on a regular basis trying to pull cash out of my checking acct. trying to get down to zero in anticipation of filing How is this viewed? Outright Fraud?

Not if you spend it. If you "hide" it in the mattress or give it to someone to hold then it's fraud. Depending on your state & homestead some cash on hand is exempt anyway.

[concerned]

Can you spend it on whatever you want? It just seems like they would expect you to tell them what you spent your earned money on, and I would think they only expect that it would be for necessities. Am I right? Do you have to be prepared to document what you used the withdrawn cash for?

[robivi3]

Just out of curiosity, if you can pay off all of your CC's why would you want to sacrifice your home? Just asking, you may have good reason but given your situation (ability to pay) your BK petition might raise some flags.

[concerned]

We can't pay off all of our credit cards, but we wanted to keep the one linked to our checking account open!

[okane]

$600 pmt to a single creditor in 3 months

This is like $600 extra exceeding the minimum payment right? So if your minimum pmt is $220 with a credit card, the payments would be over $600 in a 3 months time but you are not overpaying as preferential pmt because thats what is due no matter what. Right?

[StaciMM]

No, its over $600 total. Its not fraudulent, but it can turn your case into an asset case as the trustee will take that money back so it can be spread out evenly among your creditors.

This is like $600 extra exceeding the minimum payment right? So if your minimum pmt is $220 with a credit card, the payments would be over $600 in a 3 months time but you are not overpaying as preferential pmt because thats what is due no matter what. Right?

[hhou812hh]

This is like $600 extra exceeding the minimum payment right? So if your minimum pmt is $220 with a credit card, the payments would be over $600 in a 3 months time but you are not overpaying as preferential pmt because thats what is due no matter what. Right?

Yes the trustee will take back the money and spread it amongst all unsecured creditors. That's how he/she gets their cut. This won't affect your discharge, but the creditor that was paid the 600 or more will most likely be pissed and you will probably have this particular account closed.