Credit Cards and BK

[kilogram]

Another post here stated that you must refrain from using CCs for the 6 months prior to filing chapter 7. Is this really feasible for someone who relys on CCs to 'make ends meet'? My wife and I realized that we had a problem 6 weeks ago and needed to look for help. We have near stopped (99.9%) charging on our CC's for the last month as chapter 7 is in our future.

We are taking our lawyers advice and are planning on surrendering my wifes current car(owe 15K more than it's worth). He also suggested that my wife and I get new vehicles. My car was worth 3 times the amount of the exemption (owned outright). I have already made a trade/purchase. My wife is set to pick her new vehicle up tonight. Financing is a PITA when you are as overextended as we are... luckly my wifes approval when through before my new loan hit the CRAs.

After reading that post, I'm now worried. With 2 new car payments (plus the current Explorer payment for the time being) we cannot even pretend to make our finances work for another month. (cash flow of -$2800 in 30 days... mortgage is $2600/mo).

I have 2 concerns with our revolving debt utilization and possible objections:

1) We have taken $4200 in CA's within the last 60-90 days. We understand that we may have to pay these back. What might the terms be?

2) We have a $21K unsecured line of credit attached to our checking account (overdrafts pull from loc). This line was opened 7 months ago and has been near maxed out for 2.5 months now. What are the chances that our credit union will object to this debt being discharged? They hold the financing on the car we are surrendering, and on a travel trailer (RV) that we would like to reaffrim (but can live without). The minimum payment on this loc is $420/mo which is larger than all other minimum payments combined.

I thought about calling the CU and telling them to come pick up the explorer... the problem is that EVERY one of their loans has a clause... defaulting on anything (with anyone) gives them the right to demand payoff in full on all outstanding loans.

Life sucks

[granny031350]

OK, I would open up another account at another credit union asap.  Credit unions are nasty nasty in BK.  Then I would get your self situated.  Your priorities are paying your mortgage, your vehicles, and your utilities, insurance, and food etc.  Let everything else go.  No more cc payments, no more Explorer payments.  But do all of this AFTER you open up a new account at another credit union.  Then wait it out.  Get caller ID and don't answer the phone unless forced.  The credit union will call incessantly as will your cc's.  Better yet, unplug your phone.  If you have cells, use those for private use.  LOL  Then file in 6 months. 

[Anonymous]

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@granny031350 wrote:

OK, I would open up another account at another credit union asap. Credit unions are nasty nasty in BK. Then I would get your self situated. Your priorities are paying your mortgage, your vehicles, and your utilities, insurance, and food etc. Let everything else go. No more cc payments, no more Explorer payments. But do all of this AFTER you open up a new account at another credit union. Then wait it out. Get caller ID and don't answer the phone unless forced. The credit union will call incessantly as will your cc's. Better yet, unplug your phone. If you have cells, use those for private use. LOL Then file in 6 months.

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AMEN.

certain actions takes time. forget the cc payments for now. worse that can happen is they report your to collections, your credit goes bad, which it will anyway after the bk, and worse they can do is sue you...BUT...all these takes time. in SOME cases, years. and even if they file a lawsuit, this too will take time, and once u file for bk, there will be an IMMEDIATE STAY, which will nullify those lawsuits.

if your true intention is to get out of debt and start a fresh debt free life, and you honestly just want a fresh start with your family, then take care of your basic needs, as granny said...food, clothing, shelter, transportation.

all things takes time to be in motion....like lawsuits and collections. read up on your rights, as to how to stop harrassing phone calls should they start coming. i'll be honest with you, the next months will not be easy,.....but if things go right, that discharge letter will be the best thing you've seen in a while.

[pennygirlal]

I'm not sure where to post this information, but I filed BK in 2002. I started trying to repair my credit. Got a letter in the mail for a seminar in Bham, went to the seminar and bought the book, think it was about $30 for the book, seminar was free. The seminar is hosted by a guy named Stephen Snyder and it literally changed my life. I am going to sound like an ad for the guy but I swear, I was already kicking myself when I started reading the book.

 I filed because I had gotten hit with a judgement for my ex-spouse's car/ nasty divorce and and I found out the HARD WAY that you can't divorce and joint obligations and he left town with the car...I got the collection calls & bills.

I tried for a couple of years to salvage my credit during the divorce, was in an accident & coudn't work for several months. What I found out from reading the book is that I should NOT have waited, I should have filed immediately before my scores went way down & I had collections.

If you are considering bankruptcy, get any books you can find by the guy, they have them on ebay now. He has one book titled Life After Bankruptcy and a new one I haven't gotten yet called Improve Your Credit Scores, Improve your life" or something like that.

I subscribe to his email newsletters at www.lifeafterbankruptcy.com/subscribe

and the information there is invaluable for people who are considering or who have filed bk and also for anyone who wants to improve their score. My scores are in the 685 range, trying to break the 700 mark. .  My husband who had no credit history when we met (bad divorce and hadn't used credit in like 8 years) has GREAT credit and scores in the 720-730's or more.

Thanks to Stephen we've got each got a mortgage in our name, both with low rates, credit cards & our credit union financed our cars at a low rate. We each get cc offers, loan offers, etc galore and our scores just keep edging up.  Read anything you can get your hands on by this guy, get his emails and go through his archived emails, it is the real deal. If I had gone to the seminar immediately after filing I'm sure my scores would be close to 750 by now. If he has a seminar in your area, GO.

Yes, he obviously makes money on his knowledge, but without the knowledge I rec'd from him, my life would be a lot harder!