Short list of do's and don'ts before filing?

[twono]

Is there a list of do's and don'ts before filing for BK?  Chapter 13 most likely.  

I have met with an attorney, and spoke with a few over the phone and have scheduled apptmnts.

I've been reading and reading for a week or so.  Checked out the NOLO site.  Etc.  But trying to read every BK thread just to find one embedded pertinent piece of information that you wouldn't think would be in the thread according to the thread title,  is daunting.

My questions are concerning a ch. 13.  

-Waiting to file for 4 months or more because of cash advances and balance transfers. 

-Opening new bank accts, change direct deposit to new bank, close all bank accts.

-Rollover IRA acct - Paying current tax bill with the IRA  (leaving the IRA at $0 balance) or having the tax bill IIB filing.

-Making payments to the banks for the cash advances and BT's.  ( I know that could be looked at as preferential payments?)

-What to do with current rewards points/$ on CC accts.  Cash out or forfeit?

-What happens to income saved from not filing for 4-6 months and not paying creditors?  Is income/bank acct balance turned over to       trustee  automatically when BK is filed?  

-Ending up with 120 day lates because of a 4-6 month delay in filing?  Is it better to try and avoid lates by trying to pay creditors in order to   not completely destroy credit reports prior to BK filing?  Currently clean reports.

I feel a sense of relief already just from deciding to do this.  Thanks everybody.

[Anonymous]

I'm days away from receiving my discharge from Ch 13, so I well know your anxiety and trepidation about this decision.  I would highly recommend that you wait until you meet with your lawyer of choice to decide on opening /closing bank accounts or draining your IRA.  As part of the process, you have to list all debt and assets to determine how much disposable income can be used to pay your bankruptcy payment to the trustee.  At that time, decisions can be made about all debt, accounts, etc.

In our case, we stopped paying our largest bill (mortgage) but only incurred 1-2 30d lates on the advice of our lawyer.  He also advised that we open IRAs and regularly make monthly contributions.  YMMV based on your situation but feel free to ask other questions and I'll try to answer.

[FireMedic1]

Since you say you dont have any lates. Don't start now. Make the minimums until you file. Lates before filing are not DC'ed ever. Once you see a lawyer. You'll get everything you need to file. Bad enough the BK will affect your scores. Don't need lates to make it worse. Good Luck!

[twono]

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Thanks BKsurvivor for the ideo of not doing anything with bank accts as of yet.  Guess i'm anxious to get things moving.  

Firemedic....i won't be able to make all the monthly payments.  And since there are recent BT's and cash advances, i need to wait at least 90 days to file, according to an attorney and my research.  So, not being able to make all the monthly payments and having to wait at least 3 months to file, i have no other choice but to incur many many 'lates' on my reports before filing.  I may wait up to close to a year or whenever the lst court papers start to come in.  I'll know more next week.  I intend to meet with at least 6 attorneys.  

Are (25) 120 day lates worse than (15) 120 day lates at the end of the day?  I'm mentally prepared to have a credit score of 0 when all said done with a lot of 120 day lates.  

[FireMedic1]

They will look bad. As time goes on. They will fall off one by one and less will appear until the last one is gone. That's when you'll recoup the points. Although the charge offs will start to show up and then the collection agencies take over after the OC gets paid. Sorry you have to go thru this. All I can say is best of luck and it can only get better in the long haul.

[Anonymous]

I don’t know very much about a 13, but my only advice would be to talk to your lawyer before doing ANYTHING financially related because they know your situation better than anyone.
Best of luck to you, hope your CH13 plan works for you!

[twono]

Thanks all....No mortgage or family to consider, and i make too much for ch. 7, so 13 it shall be.  It's time for a change.  Get slapped back into reality.  

If attorneys' fees are indication of the quality of the attorney, does $4400 get me a good one? 

[sarge12]

My only advice is to get a good reputable BK attorney, and let him advise you. He might advise you to file ch.7 instead. As a do...always answer the trustee's questions honestly and fully to the best of your ability. Never try to hide any debts or assets. In most cases ch.7 is preferable, cheaper, and quicker to complete. In both types of BK, once filed and the automatic stay goes into effect, do not communicate with your creditors except to refer any questions to your attorney. If they try to contact you after that you need to tell your attorney, because they cannot do that legally. Your creditors will be notified with the case number by your Attorney in writing. There will be a meeting in the federal court set up, and any creditors can voice any objections at that time, but usually creditors do not even choose to attend the meeting. It is typical for the meeting to last less than 30 minutes. The filing will be a matter of public record, but most of your friends will not know unless you tell them, even though they could find out if they checked, they most likely wont. The meeting of the creditors is usually not near as scary as people think it will be. They are not going to call you names or question your charachter. They are mainly going to verify the accuracy of your papers for filing. They will not try to point out that you were irresposible...it is too late for that. You are required to take an online financial management class now, but your Attorney will inform you what to take and when. If you wind up filing ch 13, the payments will be set based on disposible income after living expenses, and will normally be made as single payments to the trustee for 3-5 years. Attorney fees, IRS debt are the first priority debts paid followed by secured creditors, and then unsecured debt is last. Putting down household items on a finance companies security agreement does not count as security for these purposes. There are certain exemptions allowed for both types of bankruptcy that varies by which State you are filing in. Normally, there are means to keep your house and car in both types, depending on how much equity is there. In Chapter 7 you might do so by just keeping on making the payments as long as there is not too much equity there. In chapter 13, you might keep the house and if behind on payments the arrears be included as a priority debt. Having been stupid enough in my life to have had to file both types, the chapter 7 was much easier and quicker to be discharged. Filing is for sure very stressful, and embarrassing, but it is not the end of the world either. If you use the experience to learn, it can be a means to become financially responsible. Look at my scores in my signature and keep in mind I filed twice in my lifetime...I did learn!!!

[FireMedic1]

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@twono wrote:

Thanks all....No mortgage or family to consider, and i make too much for ch. 7, so 13 it shall be.  It's time for a change.  Get slapped back into reality.  

If attorneys' fees are indication of the quality of the attorney, does $4400 get me a good one? 

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Wow. You live in CA? My 7 was $2600 in Central Fl. But I guess 13's cost more. More paperwork I guess.

[Anonymous]

Sorry I can’t do quotes on mobile.
But as far as the attorney fees go, that sounds a bit high to me for a Chapter 13, but I did a 7 with a lawyer so I don’t really know what the rate is.
I’ve heard they normally charge $2,500 - $3,500 for a Chapter 13.