Filing After Balance Transfers
My husband and I have finally decided to file a Chapter 7 but I would like to ask some questions first and to give some background. About a year ago, after the birth of our daughter, I lost my job and we decided that I would stay home to take care of her. Shortly after this we spoke to a lawyer about what it would mean to file bankruptcy and we were basically told that these days it's "not that big a deal". We thought about it, though, and decided that we may be able to hang in there until I went back to work in a couple of years. At that time we were somehow making all our minimum payments on everything. We were getting a lot of great interest rates and we did some balance transfers back and forth to take advantage of the 0%, 3.9 and 5.9% offers. We did some quite large transfers and I even paid off the small balance remaining on my car in February this year. In March, my husband lost his job and this left us up the creek without a paddle. We immediately took out our $2000 savings out of our account, did a balance transfer of $6000 into our checking account , of which a lot has since been spent on just daily living and paying the absolute essentials to keep a roof over our head. We paid for as much as we could with credit and I paid $20 a month to all the creditors just to pay "something" as I did not know how long we'd have to live on this money. I know this was a huge risk especially since we did not know if we could pay it back but I could not take the risk of losing our house and I figured this would give us extra time to find a new job. In retrospect I know this was really dumb, but we panicked. At the time of our initial consultation, the lawyer told us that since we'd done balance transfers in the past that we should wait 6 months without any activity on the cards before filing. My big concern now is that since there were large transactions in February and March is this going to cause a problem for us if we file in say, September? Should we wait a year...more? Or is this irrelevant since even now that my husabnd has a new job, we are not making enough to cover even the minimums? Secondly, if we do file, how long before we can think about buying a new house? Can you get a mortgage after bankruptcy? (We currently have a mortgage which we have remained current on). We did have excellent credit before so we had lots of credit available to us. I have called all the credit cards and some of them (notably Discover) have been excellent in helping us with reduced interest and lowered minimum payments, others (notably Citibank) have been awful. I just don't see a way out. My last question is, should I tell this stuff to the lawyer, or are they then obligated to pass this info on to the creditors? We did have every intention of paying our credit back when we were using the cards, and except for the last $6000, we absolutely thought we could. We were not trying to pull a fast one, just got carried away with the low rates and high availability of funds. Can anyone (preferably a lawyer?) answer my questions?
You absolutely should tell this information to your lawyer. He or she is prohibited by the attorney-client privilege from passing this information on to your creditors (except to the extent that it has to be disclosed in your bankruptcy filings). As far as qualifying for a mortgage post-bankruptcy, the general rule is that 2 years after your discharge, assuming your post-discharge credit is good, you can qualify. I'm not a lawyer, just another "in problems" guy just like you. Now, as far as I know, you can file bankruptcy even when you got some cash advances in the last 6 months... BUT, that money can't be eliminated (just that cash advances in the last 6 months) and have to be repaid in some way. That is, you have to pay 6k if you took the money in the last 6 moths. I'd like to give you a link: http://www.lawguru.com/faq/2.html Please keep in mind that I'm not lawyer and if you don't want more sterss in your life, you should talk with one or two of those guys.
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