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Contemplating BK7- lot's of questions

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Anonymous
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Contemplating BK7- lot's of questions

Hi everyone!  Started reading on this site and have found it very informative and I feel a bit better about filing but I still have questions that I haven't found yet here.  I am scheduled to talk w/an attorney tomorrow afternoon.

 

A few years ago my husband lost his job and I became the sole provider.  He found a part time job and collected unemploymentt but that wasn't enough  Now he is self employed making decent money doing what he loves.

 

During that time we survived off of my income, whatever he brought in and of course credit cards.  Last year once he was established in his new venture I started applying for cards here and there, then I made the mistake of obtaining personal loans. The approval rate and amounts became very addicting if that makes any sense.  

 

Fast forward to now- $45k later- we are drowning and I'm kicking myself for poor choices- Debt to income ratio is way over.  We have 2 car payments up to date and we pay the mortgage on our home but with all the regular daily living expenses we can longer keep up so I am looking into filing Ch 7.  All credit lines are maxed out, store cards are not.

 

2 things- sadly I work for a CC company that we have 2 cards with.  The balances/CL is low on both and I thought about keeping them to save face if that makes any sense- is that even possible?  I am also afraid of loosing my cars but I read that you can reaffirm the loans?  But can I keep both is the question.  We need both to get to and from work plus we have 3 kids.  

 

I guess in addition to my little questions I am looking for reassurance or anyone who has a similar story AND/OR can offer some helpful tips.  This is a great place, I thank you in advance for any help anyone can provide!  

 

MBB1978

Current Score reading on CK- 605

 

Message 1 of 8
7 REPLIES 7
0REDSOX7
Valued Contributor

Re: Contemplating BK7- lot's of questions

These questions would be best asked to a reputable BK attorney in your area.  You've done the first step and set up an attorney visit, so, see what they say.

 

Now, the credit card piece can be tricky, since you work there.  Paying over a certain amount within a certain timeframe can be considered preferential treatment and the trustee can order the money returned to be distributed.  If, at the time you file, you have a balance on these cars, you ARE required to list them as a creditor in which they would get notice of your filing.  If you could pay it down before you file to zero balance, you would not have to list them as a creditor and they may survive your BK filing process - again, the question is how much and how quickly you do it - again, a qualified attorney would be your best bet.

 

You more than likely can keep your cars under the state and federal exemption limits, but it depends on your lender (some lenders require a reaffirmation agreement or force you to surrender the vehicle) and your income.

 

Good luck and keep us posted.

 

Most of us here have been in your shoes - made bad choices or simply feel on bad luck/hard times.  We've all recovered nicely and can attest there is life at the end of a BK filing.

BK Discharge 2/11/14

Currently in the garden.
Message 2 of 8
0REDSOX7
Valued Contributor

Re: Contemplating BK7- lot's of questions

One other thing you'd need to check - you generally cannot be fired for filing for bankruptcy, however, certain financial instutions make it a clause in their hiring agreement that filing a BK can be grounds for termination.

BK Discharge 2/11/14

Currently in the garden.
Message 3 of 8
Anonymous
Not applicable

Re: Contemplating BK7- lot's of questions

Thanks for the quick feedback!  I'm in Illinois.

 

For one of the auto loans I am a little bit more concerned with.  I bank with Chase, I have 2 CC's with them plus the autoloan.  Does this put me in a bad situation with them?

My fear is that they say you can bank with us and we need you to surrender your vehicle since you racked up CC's and now want to file BK7.  Silly I know....

 

 

Message 4 of 8
0REDSOX7
Valued Contributor

Re: Contemplating BK7- lot's of questions

It all depends, to be honest.  As long as you maintain payments on the car, they cannot just force you to surrender it.  They may require you to sign a reaffirmation agreement (which, if they do, you require them to continue reporting payments to the credit bureause).

 

With that said, you will want to move your money to a new bank or credit union if you are going to file BK.  Banks have what is known as a set-off clause that states upon filing of bankruptcy, they can freeze your accounts and apply the deposit accounts balance to your loans.  Obviously you'd want to move to a bank that you have zero relationship with, like a local credit union.

BK Discharge 2/11/14

Currently in the garden.
Message 5 of 8
Anonymous
Not applicable

Re: Contemplating BK7- lot's of questions

Wow that's a scary thought.  All in all I love banking at Chase so that makes me nervous!  Smiley Sad  Thanks again you've been very helpful!

 

MBB1978

Message 6 of 8

Re: Contemplating BK7- lot's of questions

I banked with Chase during my bk....discharged a car and a cc with Chase .. They never touched the $ in the bank acct
Message 7 of 8
0REDSOX7
Valued Contributor

Re: Contemplating BK7- lot's of questions

Whatever you do, do not go to Wells Fargo if you do change banks.

 

For whatever reason, even if you do not bank with them, they will freeze your funds as an "ASSET" to the Trustee.

BK Discharge 2/11/14

Currently in the garden.
Message 8 of 8
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