New here with questions!

[catleg]

You'll be surprised how the offers you get from your creditors will improve once you stop paying them, at least for the first 6 months or so.

Annoying however are the incessant calls to "help" you because you must have "forgot" your blood sucking payment for the month.

BofA actually called once and offered to settle a business card for 10%, but I knew I was going to file anyway, so I blew it off.

[CCsSuck]

No, because when you file bk (if you do) you won't be renegotiating any debt. You'll be eliminating it. From the motivation standpoint, trying to work out your credit card debt just makes you look like a person who really tried to avoid bankruptcy.

Thanks, that makes sense and is kind of what I figured, I just wasn't sure if it would give them "more ammo," lol.

Some people have found the kbb value of their cars was seriously inflated. I just read another thread where the guy was really concerned about his car and he was advised to seek other methods of appraisal - trade-in at a local dealership, private appraisal, etc - to lower that value. If you did decide to file you could speak with an attorney (or three) and find out what the trustees in your area accept as far as car valuations go. You could also begin speaking to attorneys now in free consultations. Get the lay of the land where you live so to speak.

I'm not really worried about my car if I go the BK route; I'm just concerned it could get taken away if pre-BK I default on my CC's and they get a judgment against me. I've thought about going to the atty's, but I know for a fact I couldn't file anytime soon if I wanted to, anyway, because of the loan I'm repaying to a friend, and as everyone is quick to point out, as soon as you make up your mind to file, if you continue to use your CC's, its fraud. Unfortunately, I'm still using them to survive at the moment, so my mind is officially still undecided with how to proceed and I don't want to put an atty in an awkward position. Nor do I want to go and be told to stop using them immediately and then go back in a year and for them to see I never did in the first place. And then, of course, there is part of me that even though a consultation would probably be helpful, that would like to respect their time and not waste it.

Not if you have receipts and explain that you were afraid of your creditors taking your mortgage payment and grocery money. Lots of people here went cash in order to avoid their creditors and had their bk work out fine.

I realize they can still garnish my wages, but at least that I could count on. I think it would be devastating to see I finally saved *something* and then find out its been seized after the fact. FL has a $1,000 personal property exemption (more if you don't use your homestead, which I would have to), so I guess technically they could still seize the cash if they were overly motivated, but I'd feel more secure with it being at home and not in a bank completely out of my control.

No, those are secured creditors. You keep paying your mortgage, your car (if you intend to keep them) and the expenses you need to live - food, lights, gas, etc

I also meant (sorry I worded it poorly), too many thoughts at the same time! if I stopped paying my BofA now and continued paying all the other credit cards until my wages had been garnished. I realize it would take a while for this to happen and if I did go BK if I happened to still be doing this during the lookback period, would it create an issue if they saw I was selectively paying some of my CC's and not BoA?

The creditor has no power to recover money from your friend. The trustee can do that kind of thing, but credit card companies can't.

That's reassuring!

Thanks for your insight, it was helpful

[CCsSuck]

Just wanted to say hi Mike and wish you good luck on your life restructuring journey. It's the same thing as a business restructuring. You want to put yourself on a sound footing. When your credit card debt is approx 100% of your annual pre-tax income, it's definitely time to consider the big reset of BK. Just one question, do you have any equity in your home you need to protect? Any student loans? Since you're paying off your friend you'll have to allow a decent interval of time to elapse before you can file BK. You might use some of that time to get your exemptions lined up and best use of your funds (besides credit card payments of course). Luckily you're below median so you should have little trouble with a chapter 7 as long as you can come up with a reasonable budget.

Thanks

I don't currently have any student loans, though I DO want to go back to school eventually. It kind of makes my head hurt thinking about the possibility of BK over 30k, all of which is credit card debt, only to think about taking on 30k of student loans afterwards that would haunt me for the rest of life/until they're repaid, lol. That being said, if going to school helps me get a better paying career...

Florida is very lenient on Homestead exemptions, so I should be okay with the house as long as I keep paying it. I have a feeling the lender might not be too thrilled since I only bought the house a year ago, but my equity in the house is marginal at best right now, and since its homesteaded it's essentially untouchable.

[debee]

... if down the road I do decide to file chapter 7, would agreeing the debt is never to be renegotiated now hurt my case?

No, because when you file bk (if you do) you won't be renegotiating any debt. You'll be eliminating it. From the motivation standpoint, trying to work out your credit card debt just makes you look like a person who really tried to avoid bankruptcy.

I have about $1,200 equity in the car.

Some people have found the kbb value of their cars was seriously inflated. I just read another thread where the guy was really concerned about his car and he was advised to seek other methods of appraisal - trade-in at a local dealership, private appraisal, etc - to lower that value. If you did decide to file you could speak with an attorney (or three) and find out what the trustees in your area accept as far as car valuations go. You could also begin speaking to attorneys now in free consultations. Get the lay of the land where you live so to speak.

... would a lack of a bank account paper trail be a huge issue with a trustee?

Not if you have receipts and explain that you were afraid of your creditors taking your mortgage payment and grocery money. Lots of people here went cash in order to avoid their creditors and had their bk work out fine.

I'd keep paying both of those and my utilities, but would selectively making these payments over other creditors be something the trustee/judge would balk at?

No, those are secured creditors. You keep paying your mortgage, your car (if you intend to keep them) and the expenses you need to live - food, lights, gas, etc

The last thing I need is for them to try to recover the money from her and totally destroy our friendship.

The creditor has no power to recover money from your friend. The trustee can do that kind of thing, but credit card companies can't.

[catleg]

Just wanted to say hi Mike and wish you good luck on your life restructuring journey. It's the same thing as a business restructuring. You want to put yourself on a sound footing. When your credit card debt is approx 100% of your annual pre-tax income, it's definitely time to consider the big reset of BK. Just one question, do you have any equity in your home you need to protect? Any student loans? Since you're paying off your friend you'll have to allow a decent interval of time to elapse before you can file BK. You might use some of that time to get your exemptions lined up and best use of your funds (besides credit card payments of course). Luckily you're below median so you should have little trouble with a chapter 7 as long as you can come up with a reasonable budget.

[tobee43]

Hello everyone,

I'm Mike and I live in South Florida. welcome to the bkforum mike!

1) Right now I am current on all of my debts. I have never missed a payment, been late on a payment, or been in collections -- for anything. I have approximately 30k in unsecured debt (Credit cards). With Florida's exemptions in mind, it would appear that I'm "judgment proof," however, there are a few things that make me nervous.

The card with the biggest headache is BofA, (I owe them roughly $14k, the card is maxed out, it has a 17.68% rate, and a monthly payment of about $350.00). In the past I called them and first asked if they would lower my interest rate (it used to be about 8%, lol), and they of course declined. Then I basically said, I can't pay this anymore, is there anything you can do to help me? They transferred me a bunch of times and then somebody asked me about my income and expenses, and said it appeared I qualified for some program they had which would lower my interest rate to around 2%, shut down my account, and have the debt repaid in 5 years with a monthly payment of if I remember

I'm not sure how much my situation has really changed since then number wise, some things have gone up, some down. In any event, lets say I played hardball this time and they agreed to let me on; does anyone have experience with accepting a debt repayment plan with the bank at a lower interest rate and then filing for chapter 7 afterwards? I realize if I do this, my credit will suffer (I don't really care, even though my score isn't horrible, I cannot take on any more credit/debt anyway, so whatever, lol), but if down the road I do decide to file chapter 7, would agreeing the debt is never to be renegotiated now hurt my case?

actually, not...it would basically be the same if you went to one of those "debt consolidation" places..while in many cases people make payments as a negotiated amount for some a year of two and then file bk...it will no way effect you as the debt is still considered unsecured.

That's the first question. Now, the second question, with the same card in mind; if I were to just stop paying it altogether and not make any effort to work out any plan with them, what would happen? I've done a lot of reading and I have a pretty good understanding how the process works up and until the judgment against me. But let’s say they get a judgment, which they more than likely would, how will they collect it? I'd be somewhat okay with them garnishing my wages, because by the time that'd happen, I'd probably just stop paying all the other cards, too, and let them wait in line while I lived with $500 less a month. Since my minimum payments already add up to around $700 a month, it honestly doesn’t sound like a horrible tradeoff. However, what I'm really concerned with is a) my car. And b) my bank account.

well in most districts in florida they cannot garnish wages. however, they can put a lien on your car, or you bank account if they get a judgment.

A) I bought a used car about 6 or 7 months ago (it’s an 05 Hyundai Elantra GT with 67k miles on it – certainly nothing fancy, but it gets me from point a to point b). It’s financed (I was shocked, lol), but the Florida exemptions list $1,000 interest in an automobile (FL 222.25 Other individual property of natural persons exempt from legal process. —The following property is exempt from attachment, garnishment, or other legal process: (1) A debtor’s interest, not to exceed $1,000 in value, in a single motor vehicle as defined in s. 320.01.). The KBB trade in value is appoximately $4-5K, and I owe approximately $3,800 on it. If I eventually did file for BK, I would want to try to reaffirm the car, but, if I were to be sued before going that route, could they take my car?

if the trustee finds you are in an asset situation (which from what your stating my initial reactions you are not), with respect to your car, if it is proven it is worth more than the exemption allowed you are offered to buy back the difference. and, in some cases and in some districts in certain counties you may qualify if you are not a homeowner for an additional exemption in lieu of the homestead...where as any amount over the allowable auto exemption, this amount can be applied to your car. but, the bottom line is, you would still have the opportunity to "buy back" the car from the trustee.


What concerns me is the use of the word "interest." It would appear that even though I don’t own the vehicle, I have about $1,200 equity in the car. I get that it might not be worth it to them, but could they theoretically take my car, sell it, payoff the lien holder and take what’s leftover?

i don't think that likely with the information you have provided thus far.

B) Right now everything I make, I payout (it’s a never ending viscous cycle that I'm extremely fed up with). After my minimum payments on my cards, my mortgage, car, and insurance, its all gone. And now with my cards being maxed out, living expenses are a challenge. Right now if they got all the judgments in the world against me, there wouldn't be anything in my account to seize, but theoretically if I were to stop paying this/other credit cards, I would hopefully be able to finally put some money away. If they got a judgment, it's my understanding that they could potentially seize my account. What is less clear to me is 1) if they can seize my account AND garnish my wages at the same time, or 2) if they could seize my account regardless of where the money in it came from. FL uses the federal guidelines on wage garnishments, which would be 25% of my after tax wages, but the only money I would have in the account would be direct deposited from work, so if they seized it would I have to go to court for them to release a majority of the money, or would they be able to keep all of it? I suppose I could close out my account when I got sued to negate that issue, but they could still seize the nonexempt cash, so I don't think that would do much more than slow them down a bit. That being said, if I did do this, how would a BK trustee feel about it down the line? I would of course keep good records of what I made, and what it was spent on, along with the receipts where practical, but would a lack of a bank account paper trail be a huge issue with a trustee?

i understand you are scared and concerned about what "they" can do....however, we simply only left in our account what we needed for bills...the paper trail for the bk court is good to show exactly where you funds went...and how badly you need to file. so it's a double edge sword...i would not worry about your accounts getting seized...unless you have over a million dollars hanging out in your checking account..

C) If I stop paying BofA, what will happen to my other cards? I know in the past, the interest rates would likely go up/the other cards from other banks would be shut off, but didn't the CARD act make it illegal for banks to make decisions based off of your relations with other banks or something to that effect? Should I pretty much count on the other cards being shut down, anyway, as well?

yes, you can pretty much count on them either upping your interest rates and or shutting your account...however, it's all part of what one goes through when living this experience...

And lastly, I realize this isn't really the right section to ask, but since I'm on a roll, hopefully you all won't mind! As far as preferential payments go, how does it look if you stop paying one card over the other in court when you're being sued/if you file for chapter 7? I guess another way to ask this would be, what about things you want to reaffirm in BK? If I did file, I'd want to keep my house (I'm current) and my car, so obviously I'd keep paying both of those and my utilities, but would selectively making these payments over other creditors be something the trustee/judge would balk at?

if you retain an atty, it will be explained to you that you are no longer allowed to pay anyone during your filing time. we paid every card up until our filing date. we were never asked even why...even tho we were advised by atty to immediately stop payments months prior to our filing. it was a personal decision we made to keep paying. and it made no difference to our trustee. yet, had we made a huge payment a week before our 341, that would have stood our like a sore thumb and we would have most certainly been questioned about that payment. usually, even IF it found that your have in fact created a preferential payment, the trustee retrieves it and distributes amongst other creditors...unlikely here i would think.

Another major concern is that I'm in the process of paying off a loan from a friend and I'd assume if/when BofA sued me, they would eventually manage to get all of the details of my financial life and would ask about the "extra" money from my vacation check/past tax return (it was large with the house credit), see it went to my friend which in turn of course kept me insolvent. I realize in bankruptcy this would be an issue with the waiting period and whatnot, but how would this play out as far as being sued for a judgment?

why do you feel they would go after your friend? the only way anyone would be entitled to do that, is if she co-signed a loan with you, or you have cc's together where you are both the responsible party.

Any thoughts/insight/experience would be greatly appreciated. Thanks for taking the time to read all of my rambling thoughts!

hope this gave you a "starting" line. we all here understand the stress and confusion going through this can be. best of luck to you! there's many of us from florida on the forum!

also mike, we have a flordia group on the forum ...you are most welcome to stop on by! http://www.bkforum.com/group.php?groupid=9

[CCsSuck]

Hello everyone,

I'm Mike and I live in South Florida. I've been trolling on your website for a few weeks and to be honest I've been pretty hesitant to post anything here that could have the potential to one day come back and bite me. That being said, I still have questions and figured I might as well just break down and ask. For now lets just assume that I am not currently considering filing bankruptcy; but merely coming to the realization that drowning in debt is no way to live, and because of that, I'm considering all of my options and the potential consequences. One day I'll make a post that's much more specific to my situation, but here are a few general questions that I have:

1) Right now I am current on all of my debts. I have never missed a payment, been late on a payment, or been in collections -- for anything. I have approximately 30k in unsecured debt (Credit cards). With Florida's exemptions in mind, it would appear that I'm "judgment proof," however, there are a few things that make me nervous.

The card with the biggest headache is BofA, (I owe them roughly $14k, the card is maxed out, it has a 17.68% rate, and a monthly payment of about $350.00). In the past I called them and first asked if they would lower my interest rate (it used to be about 8%, lol), and they of course declined. Then I basically said, I can't pay this anymore, is there anything you can do to help me? They transferred me a bunch of times and then somebody asked me about my income and expenses, and said it appeared I qualified for some program they had which would lower my interest rate to around 2%, shut down my account, and have the debt repaid in 5 years with a monthly payment of if I remember correctly, around $200. He also said that if I accepted this, the debt could never be renegotiated. I jumped at the opportunity. Then was told to call back in about a week to make sure I had been approved and everything was set. Long story short, I was told I needed to make around $100 more a month to be considered for the program and to call back in 6 months if my income changed, or to look into a DMP. I make around 32k a year before taxes, by the way. I had already looked into this before and the result was basically I didn’t make enough to live off after all the payments, and knowing full well all my cards would be shut off as soon as I entered the program, I decided against it.

I'm not sure how much my situation has really changed since then number wise, some things have gone up, some down. In any event, lets say I played hardball this time and they agreed to let me on; does anyone have experience with accepting a debt repayment plan with the bank at a lower interest rate and then filing for chapter 7 afterwards? I realize if I do this, my credit will suffer (I don't really care, even though my score isn't horrible, I cannot take on any more credit/debt anyway, so whatever, lol), but if down the road I do decide to file chapter 7, would agreeing the debt is never to be renegotiated now hurt my case? Sure, it’s unsecured, and will remain that way, but I have no idea what kind of paperwork would be involved with getting on the plan and I don’t want to shoot myself in the foot now to save $150 a month.

That's the first question. Now, the second question, with the same card in mind; if I were to just stop paying it altogether and not make any effort to work out any plan with them, what would happen? I've done a lot of reading and I have a pretty good understanding how the process works up and until the judgment against me. But let’s say they get a judgment, which they more than likely would, how will they collect it? I'd be somewhat okay with them garnishing my wages, because by the time that'd happen, I'd probably just stop paying all the other cards, too, and let them wait in line while I lived with $500 less a month. Since my minimum payments already add up to around $700 a month, it honestly doesn’t sound like a horrible tradeoff. However, what I'm really concerned with is a) my car. And b) my bank account.

A) I bought a used car about 6 or 7 months ago (it’s an 05 Hyundai Elantra GT with 67k miles on it – certainly nothing fancy, but it gets me from point a to point b). It’s financed (I was shocked, lol), but the Florida exemptions list $1,000 interest in an automobile (FL 222.25 Other individual property of natural persons exempt from legal process. —The following property is exempt from attachment, garnishment, or other legal process: (1) A debtor’s interest, not to exceed $1,000 in value, in a single motor vehicle as defined in s. 320.01.). The KBB trade in value is appoximately $4-5K, and I owe approximately $3,800 on it. If I eventually did file for BK, I would want to try to reaffirm the car, but, if I were to be sued before going that route, could they take my car? What concerns me is the use of the word "interest." It would appear that even though I don’t own the vehicle, I have about $1,200 equity in the car. I get that it might not be worth it to them, but could they theoretically take my car, sell it, payoff the lien holder and take what’s leftover?

B) Right now everything I make, I payout (it’s a never ending viscous cycle that I'm extremely fed up with). After my minimum payments on my cards, my mortgage, car, and insurance, its all gone. And now with my cards being maxed out, living expenses are a challenge. Right now if they got all the judgments in the world against me, there wouldn't be anything in my account to seize, but theoretically if I were to stop paying this/other credit cards, I would hopefully be able to finally put some money away. If they got a judgment, it's my understanding that they could potentially seize my account. What is less clear to me is 1) if they can seize my account AND garnish my wages at the same time, or 2) if they could seize my account regardless of where the money in it came from. FL uses the federal guidelines on wage garnishments, which would be 25% of my after tax wages, but the only money I would have in the account would be direct deposited from work, so if they seized it would I have to go to court for them to release a majority of the money, or would they be able to keep all of it? I suppose I could close out my account when I got sued to negate that issue, but they could still seize the nonexempt cash, so I don't think that would do much more than slow them down a bit. That being said, if I did do this, how would a BK trustee feel about it down the line? I would of course keep good records of what I made, and what it was spent on, along with the receipts where practical, but would a lack of a bank account paper trail be a huge issue with a trustee?

C) If I stop paying BofA, what will happen to my other cards? I know in the past, the interest rates would likely go up/the other cards from other banks would be shut off, but didn't the CARD act make it illegal for banks to make decisions based off of your relations with other banks or something to that effect? Should I pretty much count on the other cards being shut down, anyway, as well? Right now, I'm in the cycle of paying them, using the little available credit, then maxing them out, and them paying them, and so on. I don't make enough money NOT to use them, make the payments, and still be able to survive. Granted BofA is the biggest payment I have and would free up some money that would hopefully allow me to pay the other cards and not have to use them. Even though they aren't the safety net they used to be since I managed to max them out, it'd be nice if I knew they were still able to be used if needed and available.

And lastly, I realize this isn't really the right section to ask, but since I'm on a roll, hopefully you all won't mind! As far as preferential payments go, how does it look if you stop paying one card over the other in court when you're being sued/if you file for chapter 7? I guess another way to ask this would be, what about things you want to reaffirm in BK? If I did file, I'd want to keep my house (I'm current) and my car, so obviously I'd keep paying both of those and my utilities, but would selectively making these payments over other creditors be something the trustee/judge would balk at?

Another major concern is that I'm in the process of paying off a loan from a friend and I'd assume if/when BofA sued me, they would eventually manage to get all of the details of my financial life and would ask about the "extra" money from my vacation check/past tax return (it was large with the house credit), see it went to my friend which in turn of course kept me insolvent. I realize in bankruptcy this would be an issue with the waiting period and whatnot, but how would this play out as far as being sued for a judgment? The last thing I need is for them to try to recover the money from her and totally destroy our friendship.

Any thoughts/insight/experience would be greatly appreciated. Thanks for taking the time to read all of my rambling thoughts!

Mike.