A few Questions from a Newbie

[EquityActor]

What is the name of your state? CA

Background: have approx. $25,000 in CC debt and have been considering BK for months. I am current on all payments and had even taken out insurance on the majority of them in case I became unemployed. Well, the company I worked for went out of business last week and I am now on unemployment. On some cards, you need to be unemployed 30 days before the insurance will be activated. There is no way I'll be able to make the min. payments on most of them. I'm lucky enough to be able to afford rent and car payment. I did meet with a BK lawyer today, and feel that this is my only option.

I'm thinking of moving to Nevada because of a lower cost of living and more job opportunities.

Question:
If indeed I do move, should I declare BK here in CA or NV. My thoughts are that I should wait until I move and get an apt. and then file. If I do this, are there any rules saying you have to live in the state a certain amount of time before filing? I can't seem to find the answer on the internet and it didn't even occur to me to ask the lawyer.

Also, while I still have some $ on some of my credit cards, should I do some balance transfers to reduce the number of creditors.

Thanks.

[Elmo-1]

Welcome. It's always good to check around before jumping off into something like Bk. For starters, most Bk lawyers won't give advice that's in your best interest. They want your business as a customer - regardless of whether it's the best decision for your situation or not. Most Ch 7 lawyers won't even return your calls once they have your money and your case is filed. Just don't get too comfortable when you put your life in their hands. You and the next guy walking in simply represent one more payment on their bmw.

If you're just now having problems because of unemployment, consider checking with the credit card companies to see if they'll work with you before releasing credit's version of an WMD. As long as you have a good pay history, you could ask for an extention until the insurance kicks in. You'd be surprised how willing most are to keep a good customer from defaulting. You've done the right thing getting insurance, try to make it work for you. Bk should be used when all else fails.

Regarding the residency issue, you have to file in the state where you lived the last 90 days. If you haven't lived there that long, you can only file in the state where you've lived or kept your principal assets for the majority of the last 180 days.

28 USC §1408

[url]http://doney.net/code.htm?goto=#28USC1408[/url]

If you do decide to file, it's always best to wait at least 3 months from the date of the last card usage. This will make sure the majority if not all of the cc charges can be discharged. Also, it's next to impossible to find a place to live with Bk on your record, so if you plan to move make sure you get into an appartment or house before filing. You also want to make sure you have dependable transportation for at least a year after filing. If you're dilligent you can re-establish your credit within 12-24 months, but in the meantime lenders will be few & far between, plus you'll pay twice the interest rate and down payment as non-filers. It's no picnic and it can cost you a ton of money over the next few years if you happen to need credit.

[EquityActor]

Thank you for your fast reply.

What is WMD?

I had heard that CC companies would work with people who suddenly have financial problems, so I started to call the CC companies to explain the situation and see if there was anything could be done (ie, lower minimumums, extention). The two I spoke with would not work with me. Told me that there was nothing they could do and wished me luck.

And thanks for the advise about waiting 3 months to file after using the credit cards. The day I found out I was laid off, I panicked and took a cash advance on one card "in case of emergency". Maybe I should just put it back and eat the $99 fee that they charged me to do so.

[Elmo-1]

WMD = weapon of mass destruction

90 days is a tad more than what the law requires, but it's erring on the side of caution. It's actually any cash advance(s) or charge(s) in aggregate over $1,150 with one creditor within 60 days of filing is considered non-dischargable:

[url]http://www.doney.net/code.htm?goto=#523[/url](a)(2) Scroll down to paragraph (C).

You can't really give it back as that would be 'preference payment' and the trustee would force them to return the money. Any payment over $600 to a creditor who is a 'friend, family member or 'insider' within a year of your file date is considered preference payment. Any payment over $600 within 90 days to any creditor, same thing. The Trustee gets the money back into your bk estate and it's distributed to all your creditors. Might as well keep the money and wait out the 90 days.

[juliedealer]

here's my understanding from personal experience:

Did you create transactions knowing full well you would not be paying it back? Like take out lots of cash advances?

in the 60 days before BK I took out cash advances and made charges that were dire in nature and could prove it (car repairs, emergency vet bills etc.)

I truly think they are looking if you were trying to scam them. If you weren't I wouldn't worry too much.

I agree 100% about the lawyer, once they got your money, they can't remember who yu are.

One thing I have wondered since I filed BK, would I have alot less problems with trying to correct problems I have if I had closed the accounts myself before the filing?

One other thing I found hellpful, when you get your "stay" mail it out certified mail, return reciept requested to all your creditors immediately.

Good luck
Julie

[EquityActor]

"Did you create transactions knowing full well you would not be paying it back? Like take out lots of cash advances?"

I took one cash advance just in case the unemployment process took longer and I wouldn't be able to pay my rent. I don't have insurance on this particular card, so I have every intention of paying the minimum until I file BK.