People Going Bankrupt

[SiG Lady]

"What I hate is that while some people have to file simply because of bad luck, bad timing, or poor planning, too many others use it as a business tool to get out of paying bills."

Tell me about it!! You should see what comes over my desk every day! God, just today a new case came over my desk with about $64,000+ in just credit card bills. WTF?? Who in hell puts anywhere from $5K to $20K on a credit card over several cards--all at the same time...? Truly, this is an issue that can only be summed up by "What WERE they thinking?!?!?!?" This is simply poor planning. This client pair has good jobs. What part of "simple arithmetic" did they not get...?????

I try to stay neutral at work about all this credit abuse, but it's really, really getting hard to do.

[mpolans]

"What I hate is that while some people have to file simply because of bad luck, bad timing, or poor planning, too many others use it as a business tool to get out of paying bills."

Tell me about it!! You should see what comes over my desk every day! God, just today a new case came over my desk with about $64,000+ in just credit card bills. WTF?? Who in hell puts anywhere from $5K to $20K on a credit card over several cards--all at the same time...? Truly, this is an issue that can only be summed up by "What WERE they thinking?!?!?!?" This is simply poor planning. This client pair has good jobs. What part of "simple arithmetic" did they not get...?????

I try to stay neutral at work about all this credit abuse, but it's really, really getting hard to do.

It might have been some very well thought out planning on they're part. Maybe they figured Chapter 7 was inevitable, might as well have fun and load up the credit cards and discharge it all in bankruptcy.

[SiG Lady]

The bankruptcy administrator (trustee) can review the files and card charges in detail if they want and determine if "frivolous" spending occurred and when. 'Luxury' spending is highly frowned upon.

There are also rules about how much spending you can do on your cards anywhere from 90 to 120 days before filing your case. It's a small effort to keep people from loading up the cards just prior to filing date.

Still and all, there are a number of debt types you CANNOT discharge in a Chapter 7 proceeding: Taxes due, Federal loans, education loans, that sort of thing. This can leave people STILL very much in debt even after filing.

[DMS42]

There was a young lady where I worked that bragged about filing for Bankruptcy twice. She and her husband both had good paying jobs. I don't know what they spent their money on, but when she was telling me about what they did, she mentioned that they even used a credit card to buy food. When she was telling me all this she also said that they were planning on filing for bankruptcy again.

They also rented and were behind in the rent. Shortly thereafter they quit their jobs and moved. They owed more than 3 months rent. One of the other people at work said that this was the second time that this lady had worked for us and that they had done the same thing last time. Run up bills, file bankruptcy and leave town. Her attitude seemed to be that the business people made lots of money and what they were doing was already figured into their selling price. Same attitude about the landlords--they were renting the house out for more than what the payments were. Nice people to talk to about some things, but their take on money was weird.

I was giving her a ride to work because she lived close to me and one of their cars was down. She never offered to pay. Finally a co-worker talked to me and told me that this lady would ride with me forever if I didn't charge her. So I finally asked the lady to pay and she quit ridding with to work with me.

Some people when they know that they are in over their heads will go on a spending spree prior to filing for bankruptcy. Although I think that I read someplace that if that can be proven then the people will have to pay for those items.

Edited to add that I'm sometimes a slow typist.

Edited April 2, 2008 by DMS42

[el pres]

There was a young lady where I worked that bragged about filing for Bankruptcy twice. She and her husband both had good paying jobs.

I have a friend with a great paying job that unfortunatlly had to file due to over the top medical bills. Their BK lawyer

instructed them to do ecxactly what you describe, go buy food and everything you can think of right now to make

this thing worth while. They would do the $600.00 weekly Costco run and even bought a car on a card !!!

I think the Lawyer gets more $ if the amount is higher ,right???

[SiG Lady]

"Although I think that I read someplace that if that can be proven then the people will have to pay for those items."

I mentioned something akin to this in my previous post about "luxury spending." Clients need to be very careful WHAT it is they buy before filing and how CLOSE to filing date they do so. It is advised to move your cash out of your bank accounts and buy NECESSITIES with it. Keep the receipts in case your purchases and movement of money is questioned. You're less likely to be hassled about that issue if your purchases went toward rent, food, medical. If you suddenly run up a bill at the local jewelry store, well, your a** is grass.

Most lawyers locally charge a flat fee for bankruptcy proceedings. Contingency fees work better for Personal Injury or Negligence/Malpractice suits where matters aren't so cut and dried. Many of our local lawyers are in the neighborhood of $1,500 total for a Chapter 7 bankruptcy case. Ours at the office is $1,201 for the atty + $299 for the court fee = $1,500. We accept installment retainers on that amount but do not file the case until the fee is paid in full.

The people I DO feel a bit sorry for are the folks who are underinsured, underemployed (thru no fault of their own) and who suddenly have a catastrophic medical incident. These are the folks you can sympathize with sometimes. But I have little sympathy for the "credit card f**kers" who have no sense of responsibility for their own obligations--or for the rest of the country.

All this wave of bankruptcies last year and this year is very bad for the national economy in every direction. The three of us processing bankruptcy cases at the office right now are swamped with work and running around in circles. And the bankruptcy intake calls just keep coming.

[EricW]

Hell freezes over. I got my software today.

Lesson learned. Only pay via AMEX using Amazon or another big box outlet.

====================================================

If all these yo yos are going bankrupt, how come they won't deal on those overpriced houses they bought? Not even a mobile home is within 2 1/2 times my income here. I'll give ya fair money, but the stupid money is your problem.

[Tom S.]

There actually is a good use for bankruptcy that you all can use.

Next time a telemarketer calls, ask if they can send out the product before you file for bankruptcy next week. I get hung up on a lot............ :-)

Edited April 7, 2008 by Tom S.