A friend needs help

[fltn]

I have a friend that is probably going to file BK.

He is wondering if he should transfer all balances to just 2 cards and close all the rest in good standing.

He has not missed payments yet but will in the next few weeks, no way around it.

So is it better to just leave 2 cards bad instead of 20? 

Will he get in "trouble" for doing this or will is just basicly be a default.

He is trying to plan for after a BK and a quicker comeback after.

His wife died and they had many joint accounts and without her income can't pay them all and that is why he will default.

Sorry if this is the wrong thred, but I feel that more seasoned myFicoers in this thred may offer better advice.

[39Xelor]

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@fltn wrote:

I have a friend that is probably going to file BK.

He is wondering if he should transfer all balances to just 2 cards and close all the rest in good standing.

He has not missed payments yet but will in the next few weeks, no way around it.

So is it better to just leave 2 cards bad instead of 20? 

Will he get in "trouble" for doing this or will is just basicly be a default.

He is trying to plan for after a BK and a quicker comeback after.

His wife died and they had many jint accounts and without her income can't pay them all and that is why he will default.

Sorry if this is the wrong thred, but I feel that more seasoned myFicoers in this thred may offer better advice.

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Your friend wants to burn as few bridges as possible in regard to BK... so, yes it's better to burn 2 as opposed to 20.. Obviously, since he is going through a BK he will burn some, but again, the less the better! Now, don't forget that he could technically only have 2 cards in the BK, but when the BK hits his reports the other open lines may be slashed dramatically or closed by the creditor in fear they will be burned too.. Best of luck to him..

[fltn]

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@39Xelor wrote:

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@fltn wrote:

I have a friend that is probably going to file BK.

He is wondering if he should transfer all balances to just 2 cards and close all the rest in good standing.

He has not missed payments yet but will in the next few weeks, no way around it.

So is it better to just leave 2 cards bad instead of 20? 

Will he get in "trouble" for doing this or will is just basicly be a default.

He is trying to plan for after a BK and a quicker comeback after.

His wife died and they had many jint accounts and without her income can't pay them all and that is why he will default.

Sorry if this is the wrong thred, but I feel that more seasoned myFicoers in this thred may offer better advice.

---

Your friend wants to burn as few bridges as possible in regard to BK... so, yes it's better to burn 2 as opposed to 20.. Obviously, since he is going through a BK he will burn some, but again, the less the better! Now, don't forget that he could technically only have 2 cards in the BK, but when the BK hits his reports the other open lines may be slashed dramatically or closed by the creditor in fear they will be burned too.. Best of luck to him..

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That's what I thought too. So he figured he would just PIF what you could, transfer the rest, and close all the good accounts before filing.

[pizzadude]

I'm going to move this to the Bankruptcy forum for better visibility.

[StartingOver10]

There are some issues with his plan.

I understand that he wants to burn few (rather than more) bridges. There is such a thing a preferential payments - I would think transfering the debt to other cards would be considered a preferential payment (or maybe fall under some other bk law). Take a look at this link for example:http://www.nolo.com/legal-encyclopedia/bankruptcy-trustee-payment-preferential-transfer.html

He would have to close the zero balance accounts before he files. The creditors won't leave them open  when he files. The creditors subscribe to a list of bk filers and when your friend files his name and SS is on the list and once that happens the creditors close the accounts - even with a zero balance. Even if the account is missed  initially, it is likely to get closed in the future after discharge.

I'm not saying to just blindly file. But your friend should research and study the bk law enough to know what to ask his bk attorney so he doesn't accidently do something that would cause him problems during the bk process. The NOLO bankruptcy book should be able to answer questions too.  It is a valuable resource. Also there is a bankruptcy forum you can look up. PM me if you want the name. It has valuable info.

[fltn]

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@StartingOver10 wrote:

There are some issues with his plan.

I understand that he wants to burn few (rather than more) bridges. There is such a thing a preferential payments - I would think transfering the debt to other cards would be considered a preferential payment (or maybe fall under some other bk law). Take a look at this link for example:http://www.nolo.com/legal-encyclopedia/bankruptcy-trustee-payment-preferential-transfer.html

He would have to close the zero balance accounts before he files. The creditors won't leave them open  when he files. The creditors subscribe to a list of bk filers and when your friend files his name and SS is on the list and once that happens the creditors close the accounts - even with a zero balance. Even if the account is missed  initially, it is likely to get closed in the future after discharge.

I'm not saying to just blindly file. But your friend should research and study the bk law enough to know what to ask his bk attorney so he doesn't accidently do something that would cause him problems during the bk process. The NOLO bankruptcy book should be able to answer questions too.  It is a valuable resource. Also there is a bankruptcy forum you can look up. PM me if you want the name. It has valuable info.

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I will look at that link. I would like the name of the forum. 

I had a Bk back in 2009, but I filed myself no lawyer. I downloaded the forms online. I had no issues, but had I known I would not have filed, since all of my debt was 15+ years old, some not mine ID theift and some medical that was on my credit report well beyond the SOL.

Oh well you live and learn.

My friend would close good accounts prior to filing and he would try to transfer small cc's to larger limit CC's and try to make payments if he can for a month or 2 before missing payments, and then file about 6 months after default on 2 accounts. He has no open car loan or moetgage. Just a bunch of CC's. He is not going to try to hide assets or anything. Basicly just wants to only burn a few rather than a bunch. I know it is still going to be a lot of money, but will be easier for him to bounce back with less bridges burned was the thinking.

Thanks for the link I will look into it and look into the forum.

[ezdriver]

Asusual, startingover offers some sage advice there. I would add that all financial transactions done within a certain period of filing for bankruptcy [could be as much as 12 months] can be the subject of a trustee's interest and inquiry. I totally understand the desire/motive but sometimes good intentions/motives can get us into trouble. My recommendation is to leave well enough alone and go into the bankruptcy process with the minimum risk of getting into trouble with the trustee.

For what its worth, my trustee disallowed a 12-moth-old private auto financing arrangement on one of my cars.