CH. 7 when to file, will change in work effect filing
Q.I have been unemployed since mid Sept. 2001 (living of credit cards & savings), & I am running out of money to cover debt. I am considering CH. 7, and have 3 questions: 1. How long do I need to wait after using credit cards to file and be able to discharge debt? (stopped charging 2 weeks ago.) 2. I am seeking temporary work until I return to school full time in September. Will a change of unemployed to employed after filing effect the validity of my claim? (expenses will still be greater than income) 3. I know the filing fee is around $200, however, what is a ''ball park'' range a lawyer in the AUSTIN area will charge for a Ch. 7, $11K auto secured, $16K unsecured, & $5K auto secured Reaffirmed?
A.Short answer -- I recommend you file sooner rather than later. You are essentially asking if you have enough debt to necessitate or qualify for a bankruptcy filing. The Bankruptcy Code does not require a minimum amount of debt and currently there are no limitations to the amount of monthly income you can receive. Many people have the impression that they must be destitute in order to "qualify" for bankruptcy. This is not the case. If your income is high enough that it exceeds your necessary monthly expense (not including payments on credit cards)substantially then you would probably need to file under Chapter 13 instead of Chapter 7 and repay a portion of your debts. In your particular situation your monthly income is not high enough to warrant a Chapter 13 filing. You would file for a complete "discharge" (a bankruptcy term which means wipeout or erase) under Chapter 7. Your future temporary employment should not effect your bankruptcy case. Under Section 523(a)(2) creditors can object to relief for certain credit card transactions. The bankruptcy courts generally are lenient in these situations. Basically, if a debt is owed to a creditor for luxury goods or services or credit advances/cash advances and these kinds of transactions occurred within 60 days of the date the bankruptcy is filed, the creditor can challenge the transactions based on the law contained in Section 523(a)(2). However, this section of the Bankruptcy Code only creates a presumption of fraud. Your attorney can present evidence that you had a legitimate reason for the charges (i.e. you were probably trying to stay afloat with groceries, etc.). Also in a practical sense the facts are in your favor. Even if you hired an attorney and filed your bankruptcy tomorrow the transactions you mentioned did occur within the 60-day period. However, the credit card companies would have to raise the issue of fraud and my experience tells me they don't often do it. Even in the worst case scenario, should a credit card company raise a challenge a good attorney can negotiate your way out of any significant problems. Maybe if there is a challenge you reach a compromise to repay a portion of the debt. It really depends on how much the charges total with respect to any single card, and the nature of what was charged. For example, if you charged a trip to Paris for Valentine's Day then you will need to wait to file and/or be prepared for a challenge. With respect to attorney's fees I see a lot of variance depending on locale. I would guestimate a "ballpark figure" is $900 without including the $200 filing fee. I have created a discounted rate based on handling as much of the process as possible over the net. I believe a fresh start would help you tremendously. If you reside in Austin I would be pleased to serve you.
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