Ch 7 - Possible Unintended Misrepresentation To Repay

[Whitepeechez89]

I recently filed chapter 7 bankruptcy (Mailed 12/20/18; Recieved by them 12/21/2018) .

Prior to my decision to actually file the petition.

My husband had a seizure totaled his car, is unable to drive and work for 6 months (11/28/18). Same week (12/2/18). I recieved a summons regarding a trial against me from a collection agency that purchased my debt from the original creditor (scheduled for 12/17/18).

I've never been to court before and had no idea how to help myself and I am representing myself because I'm broke. I looked for options to resolve the court issue.

During my search for help and options. I looked into every option but I was only seeking advice. Many sources advised me to take a credit counseling class to get advice and view my options. I registered on 12/2/18. And took the course on 12/4/2018. It was extremely insightful regarding my income and expenses. And, options for me right now.

I even spoke to a lawyer briefly regarding what bankruptcy entails on 12/3/2018. I was quoted $2,000 and had to agree to an account to get the advice. I never signed the agreement and I told the lawyer I was not sure if I was filing bankruptcy or if I was using a lawyer. At the time it was purely information I sought.

I even spoke to my boss who spoke to someone who works at a bank to see what my options were. A possible debt consolidation. Which after viewing my debt I was informed that, "People do recover from bankruptcy". This was from the loan manager who was proceeding over my application.

At this point I was still not sure what I should do and continued researching.

Then due to a multitude of personal and financial reasons. The day I paid the creditor the last payment for one loan. I ended up applying for another one from the same creditor. This was 2 weeks before hand on 12/7/18. I have 3 children and now a loss of $1,000 a month. Which based on the first payment date I believed would some what be replaced with my spouses temporary disability income at or around the same time. Of course I found out how naive I was and that I should have done more research before making any decisions.

Forward to 12/13/18 my husband informs me that he does not qualify for any temporary disability programs. I was not educated in the length of time, it apparently takes to get the financial assistance you need when disabled. The process could take 5 to 6 months. On top of that, my husband has not earned enough points according the the SSA. which means $0 help. I didnt know this before I took the loan. I thought that it was something that may take a month.

Knowing this on 12/14/2018, I began filing for bankruptcy pro se. I can't afford an attorney. And, I can't pay them later. Without my spouses income if the creditor currently seeking payment through the court system wins and my wages are garnished I will not be able to afford my rent or any other bills.

Now to the point. After much more reading, I realize how bad this looks to not only the creditor but also the trustee presiding over my case.

The thing is I have the intent to pay it and did not get it knowing at the time I would be filing bankruptcy. I plan to make my payment as well when it comes due. Do I need to be concerned with possible fraud or misrepresentation of intent to repay as agreed?

I just don't want the case discharged or to get in trouble when I'm trying to get a fresh start for my family before I lose everything.

And, yes when I filed I DID read the time frame of getting new debt that can put me in this situation when filing bankruptcy. But at the time of getting the loan I DID NOT. And, when he told me he couldn't get financial assistance, I felt like I had no choice.

What can I do to help myself now prepare for a possible dispute regarding the loan?

Any advice is welcome and please do not scrutinize me. Trust me I'm fully aware of the mess that is my life right now. I feel incredibly undereducated financially.

Thanks,
Ashely, Central Illinois

 

[quincy]

What sort of loan did you take out?

 

[Mass_Shyster]

You could withdraw the bankruptcy petition

 

[Whitepeechez89]

What sort of loan did you take out?

It is a pay day loan I believe. I pay them in installments when I get paid. Through CreditBox/Americash Loans.

 

[Whitepeechez89]

You could withdraw the bankruptcy petition

If I do that. Then the collection agency currently suing me now (I requested a continuation and it will be held on February 2019) will more than likely begin wage garnishment once they win the case and more than likely they will win because I do owe the money.

With my husbands recent injury, loss of his income and the fact he can not get any income supplement. I would lose everything. I have 3 children and live 3 and a half hours away from family. Wouldn't fighting the intent to not pay be in my best interest?

I come from a family of drug dealers, drug addicts and criminals. I do not want my children or husband any where near them. My first payment is on 1/4/19 and I will be paying it. Will that work in my favor? I already intended to before I realized the issue I had after I filed.

 

[adjusterjack]

My two cents worth.

Wouldn't fighting the intent to not pay be in my best interest?

Yes.

Since you have already filed your petition with the BK court I suggest you not make any payments on the new loan. Favoring one creditor over others is as bad as borrowing money in anticipation of filing BK.

However, with regard to the latter, I believe that the creditor will have to file something with the court to challenge the discharge of the debt. Your defense seems plausible and there is a chance he would not win. Though the worst that might happen is that the BK court would not allow that debt to be discharged.

As for the lawsuit, submit your BK petition (with the court stamp on it) to the civil court. That should stop the lawsuit in its tracks. You did list that debt on your petition?

I suggest you go on with your BK case as best you can and not withdraw it.

Keep watching this thread for additional comments as there is a BK specialist who might comment at some point.

 

[Whitepeechez89]

My two cents worth.



Yes.

Since you have already filed your petition with the BK court I suggest you not make any payments on the new loan. Favoring one creditor over others is as bad as borrowing money in anticipation of filing BK.

However, with regard to the latter, I believe that the creditor will have to file something with the court to challenge the discharge of the debt. Your defense seems plausible and there is a chance he would not win. Though the worst that might happen is that the BK court would not allow that debt to be discharged.

As for the lawsuit, submit your BK petition (with the court stamp on it) to the civil court. That should stop the lawsuit in its tracks. You did list that debt on your petition?

I suggest you go on with your BK case as best you can and not withdraw it.

Keep watching this thread for additional comments as there is a BK specialist who might comment at some point.

Ok, so I will not pay the creditor and will put a stop payment on it because it is an ACH payment.

The creditor has not filed anything. I am just being extra cautious and trying to be prepared for as much as possible. If everything else gets discharged except this one then I can come to some agreement and repay them. I can't afford to but I am sure there is something I can decrease to accommodate it.

Do I request a copy of the BK petition with a stamp on it from the court? I made a copy of all the documents before I mailed them out and have the case number now that the affirmation agreement was approved. But, I do not have a stamped copy. I'm sure I can figure out how to obtain an official copy.

And, yes I listed every single debt that I have. I even went as far as to pull my filed 2014 and 2015 credit reports (I print them every year) from all 3 places and confirmed I have all the original creditors information, not just collection agency information.

 

[quincy]

Watch for a posting from forum member "despritfreya."

despritfreya is a bankruptcy attorney and can provide information and perhaps some direction on what you should do.

In the meantime, I recommend you stop taking out loans if you are struggling already to make payments on your debts. Although you have children and that complicates things a bit, you might consider taking on a second job. Your husband, since he is out of work, might be able to watch the children while you double up on income-producing work. And, if you have any "extras" that can be eliminated from your budget (e.g., cable), now would be a good time to start canceling them.

 

[Whitepeechez89]

Watch for a posting from forum member "despritfreya."

despritfreya is a bankruptcy attorney and can provide information and perhaps some direction on what you should do.

In the meantime, I recommend you stop taking out loans if you are struggling already to make payments on your debts. Although you have children and that complicates things a bit, you might consider taking on a second job. Your husband, since he is out of work, might be able to watch the children while you double up on income-producing work. And, if you have any "extras" that can be eliminated from your budget (e.g., cable), now would be a good time to start canceling them.

Thank you Quincy!

Trust me I don't intend and will not be taking anymore loans. I have sat down and removed anything I do not have to have or I am not in an agreement with.

The 2nd job would be complicated right now considering my husband is unable to pick up our 8 month old daughter due to the fractures in his back. I generally set her up on the floor with him so he can change her and so on but he can not lift her. But, when I get home I have to give her the hands on attention that she needs as a growing infant. I work from 8am to 5pm as the lead administrative assistant/IT at Central Christian Church.

I have been seeking something that I can do from home so I can still help my husband until he is out of the brace and able to pick our daughter up. My 4 year old and 7 year old are self sufficient for the most part and if it was just those two I would. His job (he is on medical leave) even offered to hire me right now but again it would have to be when my husband is able to care for our youngest alone. The last thing I want is for him to do something he shouldn't and permanently make himself unable to work. As of right now as long as he doesn't have a seizure in may of 2019, if the doctor approves he can return to work and his license would be reinstated.

Prior to all of this I was pursuing transcribing audio files and captioning videos for a couple of companies from home. But with the lack of spousal assistance at home. I am unable to commit to it because it is not only extremely time consuming I have to many obligations that it takes me away from. A 30 minute audio file can take hours to accurately complete. I originally was working for Rev.com but had to stop.

The more I talk about this the more I realize just how disastrous everything in my life really is.

I appreciate all the recommendations and advice.

Thank you so much.

 

[quincy]

I knew just from you saying you had children that your life was a busy one.

Bankruptcy may very well be your best option and it is a realistic option available to you if you find your financial situation has spiraled out of your control.

On the plus side, you have a job, your husband will eventually recover enough to work again, and you have three kids. Those are pretty big positives that you can concentrate on when life seems a bit disastrous.

Good luck. And, again, wait for despritfreya's words of wisdom.

 

[Whitepeechez89]

I knew just from you saying you had children that your life was a busy one.

Bankruptcy may very well be your best option and it is a realistic option available to you if you find your financial situation has spiraled out of your control.

On the plus side, you have a job, your husband will eventually recover enough to work again, and you have three kids. Those are pretty big positives that you can concentrate on when life seems a bit disastrous.

Good luck. And, again, wait for despritfreya's words of wisdom.

I feel like my life is a video game where I am constantly being told I am over encumbered.

And, you are completely right. Blessings and positive things, in a time of disaster most certainly.

Thanks so much Quincy!

I will most certainly wait for despritfreya's words of wisdom

 

[despritfreya]

@Whitepeechez89

Ashley,

In all likelihood, I am going to agree with the comments that you should continue in the Chapter 7. I do have a few questions:

1. How much money did you borrow?
2. What was the money used for?
3. Do you have the ability to produce receipts for the use of the funds?

Your Trustee is not going to care that you took out a loan so close to filing. The only thing the Trustee will be interested in is whether or not you still have the loan proceeds and, if you don’t, then he will want to know where the funds went.

You took out the payday loan from Creditbox/Americash 7 days before filing. I assume you did not use the funds for “luxury goods or services”. Nor does it appear that such a loan is a cash advance that is an “extension of consumer credit under an open end credit plan”. If my assumptions are correct the debt will be covered by your discharge UNLESS the lender files a timely complaint against you under 11 U.S.C. §523(a)(2).

Even if such a complaint is filed the worst thing that can happen is you agree to pay back what you borrowed but. . . first you try to settle the lawsuit for something less than what is owed and workout payments on the settled amount.

This is not a big deal. I believe this to be minor in the grand scheme of things because, if something pops up, you can easily settle it.

Des.

 

[Whitepeechez89]

@Whitepeechez89

Ashley,

In all likelihood, I am going to agree with the comments that you should continue in the Chapter 7. I do have a few questions:

1. How much money did you borrow?
2. What was the money used for?
3. Do you have the ability to produce receipts for the use of the funds?

Your Trustee is not going to care that you took out a loan so close to filing. The only thing the Trustee will be interested in is whether or not you still have the loan proceeds and, if you don’t, then he will want to know where the funds went.

You took out the payday loan from Creditbox/Americash 7 days before filing. I assume you did not use the funds for “luxury goods or services”. Nor does it appear that such a loan is a cash advance that is an “extension of consumer credit under an open end credit plan”. If my assumptions are correct the debt will be covered by your discharge UNLESS the lender files a timely complaint against you under 11 U.S.C. §523(a)(2).

Even if such a complaint is filed the worst thing that can happen is you agree to pay back what you borrowed but. . . first you try to settle the lawsuit for something less than what is owed and workout payments on the settled amount.

This is not a big deal. I believe this to be minor in the grand scheme of things because, if something pops up, you can easily settle it.

Des.

Des,

I borrowed $900.

The loan was used to get food, winter clothes for my children, a few and I literally mean like 7 Christmas gifts for my children non of which cost more than 10 or 15 dollars, paying for and releasing my husbands totaled vehicle to the towing company, at least 4 of my bills, gas, transportation for my husband to the doctors because my vehicle doesnt fit our 3 kids and both him and I and several other things. Which are on my bank statement. I dont withdraw cash. I can provide most reciepts. Mainly the online purchases. I at the time didnt plan on bankruptcy until after it was gone and dont keep most reciepts from groceries and so on. I will gather everything I can find in the event they do file a claim.

Thank you so very much. I am feeling relieved. Less worried and ready to face what comes.

 

[despritfreya]

I doubt very much that anyone is going to quibble over the $900 loan.

Des.

 

[bubby51]

You may want to look at closing account used to pay the loan back if your paycheck is direct deposited into it as the pay day loan company could still try to withdraw from it untill they are added to your BK