Large cash purchases before bankruptcy

[StartingOver10]

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@dave024 wrote:

I will definitely run everything by an attorney. I am sure I can make some purchases of new goods and services and it sounds like I am pushing some limits. 


Bankruptcy is a new area for me, so I am sure I will pop in with questions. I have never had a late payment before and now all my accounts are going on 30/60 days past due. I am not sure what to do about the cash advances. I can't really change the past. I can't make large preferential payments to them just because of that. Is the trustee expecting me to be making any efforts to repay debts during a chapter 7?


Not sure how long I should wait. My last cash advance was Oct 24. I think most of them were a week or two before that. Capital One actually increased my limit after I maxed it out with cash advances the first time. 
Most of the "luxury items" were purchased by Mid November. Some of these things I had actually intended to sell but actually ended up getting robbed in a craigslist type transaction. Talk about a string of bad luck.
It sounds like I would be looking to file around Mid February at the absolute earliest, and maybe more towards the middle of next year if I were to attempt to pay some of these debts.
Not sure what the negatives are of not paying the full amounts due on my credit cards between now and then, or anything on some of them. I am sure some creditors may take additional collection steps before that time.

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It is far, far better to take the additional collection steps to allow time to pass between those cash advances and your bk filing. The Bk is the big bomb at the end of a lot of negative items (lates, collections, judgments, lawsuits etc). The idea is to make sure that when you do eventually file, all the items are eligible for discharge rather than filing too early and having some or all of your debts non-dischargeable.  

Take the time this weekend to review the Nolo links on bankruptcy - study Ch 7 and Ch 13. Put together a detailed list of debts and assets so you can ask pointed questions of your attorney. http://www.nolo.com/legal-encyclopedia/chapter-7-bankruptcy     http://www.nolo.com/legal-encyclopedia/chapter-13-bankruptcy

[holmesnmanny]

I really hope you didn't do any cash advances on your credit cards shortly before filing.

[dave024]

As was mentioned in this thread I did do cash advances, but I haven't filed yet. In my previous thread I specifically mentioned I am in a waiting period before filing due to recent cash advances. Do you have any recommendations for what to do if I have taken recent cash advances?

I am leaning towards waiting as long as possible before filing. I have really just hit a point where I know I need to file, but I haven't really had any negative effects due to my debt yet. I have simply stopped paying on my cards. I think I have gotten good advice here. I think StartingOver10 has given me good advice in both my recent threads. 

Even got approved for a new card yesterday. Only a $300 limit and my first card ever with an annual fee, but I like the idea of having a little more flexibility in my spending. Maybe they will increase my limit as I wait to file. 

Edit: I should mention the cash advances weren't meant to be the focus of this thread, but I am open to any advice and criticism. This thread was meant to be more focused on whether I am allowed to make purchases for services prior to bankruptcy in cash. 

[Anonymous]

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@dave024 wrote:

In this case it is less an "Individual" and more a business for services. Is there any requirement for what I do with my income currently? Surely I don't need to throw it away at my debt that I'm about to have eliminated in bankruptcy.

I'm sure my cash advances will raise questions. I am definitely hopeful I can get that issue resolved amicably. Addiction can be a terrible thing and it takes a while to start putting everything back together, but I'm slowly working on it :-)

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I thought it was an individual because you said someone.  It is not throwing away money to pay it on debt you actually owe.  Sometimes it is necessary to file bankruptcy,  but bankruptcy is not intended so that someone can spend a lot of  money on purpose, then just wipe out the debt. As far as the large purchases,  i would think the trustee would wonder why you spent cash on that instead of reducing your debt.  Just my opinion.

[dave024]

At this point it doesn't seem plausible for me to pay my debts. My unsecured credit card debt is over 200% of my total income. If I paid 90% of my after tax income it would take 5 years to pay off my debt currently. It is possible I may make token payments on some of my debts between now and filing for bankruptcy, but that really won't make a dent in the total debt. I will certainly discuss everything with a lawyer. 

I am not trying to game the bankruptcy system either. I am seeing a doctor and therapist for the issues that caused me to accumulate so much debt, so I am getting help from that angle as well. For some reason I didn't realize my financial situation was so bad and didn't realize my debts were so high. 

[Anonymous]

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@dave024 wrote:

As was mentioned in this thread I did do cash advances, but I haven't filed yet. In my previous thread I specifically mentioned I am in a waiting period before filing due to recent cash advances. Do you have any recommendations for what to do if I have taken recent cash advances?

I am leaning towards waiting as long as possible before filing. I have really just hit a point where I know I need to file, but I haven't really had any negative effects due to my debt yet. I have simply stopped paying on my cards. I think I have gotten good advice here. I think StartingOver10 has given me good advice in both my recent threads. 

Even got approved for a new card yesterday. Only a $300 limit and my first card ever with an annual fee, but I like the idea of having a little more flexibility in my spending. Maybe they will increase my limit as I wait to file. 

Edit: I should mention the cash advances weren't meant to be the focus of this thread, but I am open to any advice and criticism. This thread was meant to be more focused on whether I am allowed to make purchases for services prior to bankruptcy in cash. 

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Are you serious? You plan on filing bankruptcy but you continue to apply and obtain additional credit cards? 

Sorry folks but seems to me the OP plans on obtaining additional credit products and intentionally maxing them out like the OP already has with other cards with no intention whatsoever paying them. Then waiting for a period of time and filing bankruptcy.

Unreal...

[dave024]

I applied and was approved for a credit card. The limit is almost laughable it's the smallest I have ever had by far. I can hardly even run up a card with a limit that small.

The credit card is just to give me a little more flexibility in my monthly expenditures and I plan on paying it. I owe a ridiculous amount of money and nobody is gonna give me a credit card with a high limit. At this point I am looking to file for bankruptcy as soon as is realistic given my situation. I am not looking to defraud additional creditors $300 at a time :-).

[Anonymous]

Out of curiosity I chose to read this thread, now I wish I didn't.

While you are providing explanations for your choices, and then excusing them away, to include with the new credit card application, I am just ALARM-ed.

At a minimum, the 3 months prior to a BK, all of one's actions are heavily scrutinized.

As of today, I would not want to be sitting in your position having to answer pointed questions from a Bankruptcy Court Trustee "considering" an approval of your Bk application.

The best course of action I see which could benefit you is to immediately stop. Stop everything. Other than contacting a Bk Attorney.

Best Wishes ! ! !

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@dave024 wrote:
I applied and was approved for a credit card. The limit is almost laughable it's the smallest I have ever had by far. I can hardly even run up a card with a limit that small.

The credit card is just to give me a little more flexibility in my monthly expenditures and I plan on paying it. I owe a ridiculous amount of money and nobody is gonna give me a credit card with a high limit. At this point I am looking to file for bankruptcy as soon as is realistic given my situation. I am not looking to defraud additional creditors $300 at a time :-).

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[Anonymous]

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@dave024 wrote:
I applied and was approved for a credit card. The limit is almost laughable it's the smallest I have ever had by far. I can hardly even run up a card with a limit that small.

The credit card is just to give me a little more flexibility in my monthly expenditures and I plan on paying it. I owe a ridiculous amount of money and nobody is gonna give me a credit card with a high limit. At this point I am looking to file for bankruptcy as soon as is realistic given my situation. I am not looking to defraud additional creditors $300 at a time :-).

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I think what's disturbing is that you have come to a point where you believe you need to file for bankruptcy and have stopped paying your cards, but you are still applying for more credit. You said you are getting some help.  I wish you well with that. By the way, I still think that if you have cash enough for a "large purchase", you should still pay on what you owe.  Just my opinion.

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[dave024]

I do appreciate all advice positive and negaitive in helping me understand my situation. I do find everyone's comments helpful and am carefully considering everything you all have said.
It is a new spot for me as I sit here with $0 in my bank account and $0 in available credit. I am looking to start saving money and I will be looking to use credit cards responsibly now and in the future. I can't change what I did in the past and am looking to improve my situation moving forward.
I would prefer using a credit card for purchases over a debit card if given that option for various standard reasons. Not that I am purchasing that much of anything anyway. I could use the slightest bit of credit for "emergency" situations. I do have 15 years of solid credit history with borrowing and paying back money as expected. Had a bit of a rough few months this year that set me back financially a lot, and I am trying to move past that.