What do I have to declare


D

don

I'm thinking about bankruptcy due to credit card debt......... I'd like to
keep in good standing
with two of my credit cards and toss the other two because of the high rate
of interest and
what I owe on them - is this allowed? or must you go bankrupt on all your
debts.
 
L

Len56

You have to list all of your debts in a bankruptcy filing, and you cannot
choose which to "write off" and which to keep paying.
 
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M

Mark T.B. Carroll

Len56 said:
You have to list all of your debts in a bankruptcy filing, and you cannot
choose which to "write off" and which to keep paying.
Assuming US law: Still, with chapter 7 you can ask the judge to let you
reaffirm some? It would be odd to reaffirm an unsecured debt - I don't
know if a judge would plausibly allow it, but it's technically possible,
right? Is there any precedent for working out something with the
creditor in writing in advance where in return for the reaffirmation
they continue to offer credit?

Mark (not a lawyer)
 
M

Mark T.B. Carroll

don said:
I would like to hold on a credit card or two just because I think it would
help build back my credit.........
is this good logic?
I don't know, but it's an interesting idea.

Can you pay one off completely? Then perhaps you won't need to list it.
(Except, large payments too close to filing bankruptcy will raise
eyebrows, especially within around 90 days of it - they don't want you
preferentially paying some creditors off much more than others - so look
into exactly what recent payments to creditors are considered
noteworthy.) Though they might still cancel it after your bankruptcy if
they happen to do a routine credit check on you and see how your credit
score plummeted.

Mark
 
D

don

Assuming US law: Still, with chapter 7 you can ask the judge to let you
reaffirm some? It would be odd to reaffirm an unsecured debt - I don't
know if a judge would plausibly allow it, but it's technically possible,
right? Is there any precedent for working out something with the
creditor in writing in advance where in return for the reaffirmation
they continue to offer credit?

Mark (not a lawyer)
I would like to hold on a credit card or two just because I think it would
help build back my credit.........
is this good logic?
 
L

Len56

don said:
I would like to hold on a credit card or two just because I think it would
help build back my credit.........
is this good logic?
Nolo Press ( http://nolo.com ) has some good information and excellent books
about bankruptcy. Maybe the book you already have is from them, but if not,
here's a link to their website page on the topic of bankruptcy:

http://nolo.com/resource.cfm/catID/462A9501-9B21-4E09-A08C5A7B8AF51A79/213/161/

The easiest way to find out if you would qualify for a Chapter 7 or Chapter
13 bankruptcy, and to find out about bankruptcy and whether it would be a
good option for you, is to meet with an experienced bankruptcy attorney.
Most provide a free initial consultation.

Another resource you may want to check out is a Yahoo Group called
"Bankruptcy_Talk":

http://finance.groups.yahoo.com/group/Bankruptcy_Talk/ .

It's an online discussion group for people who have filed bankruptcy, are
thinking about filing, etc. If you never joined a Yahoo Group before, the
easiest and best way to do so (in my opinion, and for a number of reasons)
is to create an anonymous Yahoo email account for yourself and join the
group using that Yahoo email address. You can always leave the group at any
time if you don't want to continue with it.

If you do file bankruptcy, all of your credit card companies will close your
accounts, even if you were paying them on time etc. So, don't worry about
trying to keep one or two cards.

You can always rebuild your credit after bankruptcy by starting out with a
secured credit card with a $500 deposit (+/-). You will also receive lots
of offers for credit cards etc. after you file, -- but getting more credit
cards may be the last thing you need if you want to stay out of debt in the
future.

From what little you wrote so far, it doesn't seem like you have enough debt
to make bankruptcy worth pursuing. Unless you can kiss off a lot of debt
and come out of it all in much better financial shape than you are in now,
bankruptcy may not be the best option.

Good luck.
 
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mugglefuggle

I'm thinking about bankruptcy due to credit card debt......... I'd like to
keep in good standing
with two of my credit cards and toss the other two because of the high rate
of interest and
what I owe on them - is this allowed?  or must you go bankrupt on all your
debts.
Part of traditional pre-bankruptcy planning was to pay off one or two
credit cards more than 90 days before filing and hope that the issuers
of those cards would not cancel them based on your filing.

That may still work in some cases, but the mergers and concentration
of card issuers and the quick notification of bankruptcy filings
(credit agencies get scanned copies of your petition within days)
makes it less likely that you will get to keep a card. However some
credit unions and friendly societies won't take any action if you owe
them nothing on any loans. American Express was known to ignore a
filing if you owed them nothing but it depends on circumstances; and
with Amex a workaround is to have a card on a company account so while
you are jointly and severally liable, it isn't your credit that the
card depends upon.

In any of the above cases there should be no need to report the card
on your petition if you have not owed the card issuer any money for
the past 90 days. Thus the card issuer will not be notified of the
filing by the court but only by credit agencies, and they might not
pay attention to that or might not care since you owe them nothing.

The 90-day rule has to do with something called "preferences": you
cannot pay one creditor in preference to another just before filing.

You cannot otherwise pick and choose your debts to list. If you fail
to list one, you may or may not have it discharged. The general rule
(this may not apply in all districts) is that in a no-asset Chapter 7
failure to list is not grounds for non-discharge. But intentional
failure to list could have consequences.

Soon after your discharge you will get invitations from high-priced
credit card issuers. I suggest you ignore them. These firms know you
cannot get a discharge again for more than 7 years, and they impose
extortionate fees and low credit limits. If it's all you can get and
you need one to rent a car OK but even then I would pay for the actual
rental bill with a debit card instead.

In addition to the Nolo Press book which is excellent, you will find
professional materials at your county law library. While most may be
beyond your grasp, the NCLC book aimed at general-practice lawyers is
very good and simply written.
http://www.consumerlaw.org/issues/bankruptcy/index.shtml
 

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