BK questions....please help

[Anonymous]

My parents are considering BK. They have a few questions

1. Do they have to include all their credit cards?

2. Even the ones that have $0 balance?

3. Can you keep credit card accounts open after a discharged BK?

My father is going to file by himself but my mother has some joint accounts with him

4. Can she get herself off those joint accounts so that she doesn't get affected by the BK? 

[Anonymous]

1. I think you have to add them in if there is a balance but he can reaffirm them (keep paying as per original contract).

2. My lawyer told me if you have a zero balance, its not a debt. You dont have to add it in.

3. It depends on the creditors opinion of bankruptcy. Some will let you, some wont.

4. I think it depends. If she can be removed from the account I think they wont come after her. But for co-signers that cant be removed, they will come after her.

[Anonymous]

Thank you, I appreciate the feed back, anyone else care to comment?

[Anonymous]

1. Do they have to include all their credit cards?

2. Even the ones that have $0 balance?

3. Can you keep credit card accounts open after a discharged BK?

My father is going to file by himself but my mother has some joint accounts with him

4. Can she get herself off those joint accounts so that she doesn't get affected by the BK? 

Answers:

1.  Yes, ALL Debt they currently have must be included.  All of these credit cards will be closed, as will any others that are issued by any banks that you are including in the bk.

2.  No, you don't need to include any cards with zero balances.  In fact, I would try to keep as many out of the bk as you can, so the credit repair will go quicker after the discharge.   Also, it is inconvenient not to have any credit cards, so try to be sure one is left.

3.  Yes, you can, as long as the card issuer does not close them on you.   Even if it is a zero balance and you did not include any accounts with that bank in your bk, then can still close and some do as soon as they find out about the bk.   Again, try to keep as many as you can with zero balances to help you post-bk.

4. If your father is filing, then any debts on joint cards must be included.  I don't believe it is too easy to get off joint cards, so I doubt that can happen.   Be sure that your mother has at least one card that is not joint, or if it is joint, make sure it has a zero balance.    After he files, she can get him on as an authorized user so at least he will have access to a credit card.

Good luck and let us know how it goes....

[Anonymous]

Thank you for the answers. They are meeting with an attorney on Thursday. As it stands right now, they are transfering their current debts to cards that are not joint, that way it doesn't affect my mom's credit, a couple more questions that have come up....

1. On the joint accounts, can the bank close those CCs after my dad's BK or do they have to leave it open because its joint? Do they just take my dad off the account and leave my mom as the sole account holder?

2. Can they take away stuff that is under my mom's name only or my siblings like vehicles, money in bank accounts or land?

[Anonymous]

1. On the joint accounts, can the bank close those CCs after my dad's BK or do they have to leave it open because its joint? Do they just take my dad off the account and leave my mom as the sole account holder?

2. Can they take away stuff that is under my mom's name only or my siblings like vehicles, money in bank accounts or land?

______________________

1.  Yes they can and they well may do this.  You will need to cross your fingers as there is not much you can do about it.  BUT - the account needs to be ZERO on date of filing or he has to include it.  Then, I guarantee it will be closed.   I actually would NOT remove your Dad.  He will be able to use this card to rebuild his credit after the bk, assuming they do not close it.   What's more, I doubt he will be able to get removed.   Once joint, always joint from what I understand.

2. Not the siblings, for sure.  Regarding your mom, it depends on what state you live in and what kind of asset it is.   That is a better question for a bk attorney.  Have your Dad go see at least 2.  Some of them try to steer you to a Chap 13, which costs more money and takes up to 5 years, as opposed to a Chap 7, which can be all over in 120 days..........

good luck.

[Anonymous]

There are two types of Bankruptcy

Chapter 7 is debt forgiveness (which to me is a misnomer because there is not much forgiveness involved where the creditors are concerned). I don't know much about Chapter 7, but I know you can give up the car, the house, the credit cards, etc that you can't make (or don't want to make) payments on. It is quicker than 13, but you keep almost nothing.

Chapter 13 is debt repayment. I have been in Chapter 13 personally. It's more complicated than 7 and is based on formula's the court uses involving your current DTI (debt to income ratio). You may choose to keep the car(s), the house, etc. provided you have a decent DTI and can keep the payments current, OR, you can voluntarily choose to give up the car, RV, boat, etc. that you don't want to make payments on. For credit cards, if they have a zero balance, you don't have to include them, but once the creditor is aware you've filed BK, they may close them - it's their decision.

For Chapter 13 - regarding the past due payments on those items you want to keep, they are tallyed up and then a repayment plan is devised based on what your disposable income is - disposable income is that portion of your income left after paying on the items you are keeping (house, car, etc) and your monthly expenses for utilities, fuel, auto insurance, food, home insurance, etc. Your repayment plan is tailored to your specific situation. It may be two years, three years, or up to five years based on 1) the total you owe and 2) your disposable income.

As always, seek legal counsel for up-to-date information and any possible changes to bankruptcy laws.

I hope this helps....