Expert: Mark J. Markus- California Bankruptcy Attorney - 12/10/2007

Question
We are thinking of filing BK, in Calif. We have been using credit cards for the past 3months to make our mortgage payments and pay some bills, by drawing out cash. I’m a realtor and my wife and I have been looking for other work for over a year now. I have been told that the credit card companies are going to ask for a judgment during the BK for the past 3 months of credit card usage, which could amount to almost $20,000 that we’ll have to pay after the BK. Will the creditors hound us afterward for their money, or should we just wait for the 3 month period to end? We don’t want to go through the harassing phone calls 10 times a day. Also, I have been told that we could live in the house for up to a year after the BK is over before being asked to leave. Is that correct? I have been told that in this market and because of all the BK’s going on, we might be able to actually stay a little longer. It would be in the best interest of the Mortgager to simply let us stay here until they find a buyer for the house, which will end up being a short sale.

Answer
OK...this is a very complicated set of questions.  I will do my best to give you a brief response, but if you would like a more comprehensive consultation, please visit http://www.bklaw.com/consult/ and complete the 4 steps there for scheduling an appointment.

OK, first you're placing WAY too much emphasis on the 90 days.  It is true that the burden of proof shifts from the creditors to you for charges made during that period, but there is nothing magical about it other than that.  Merely waiting the 90 days to pass will likely not accomplish very much.  If the creditors can prove you did not intend or have the reasonable expectation of being able to repay your debts at the time they are incurred, then the debt will be non-dischargeable.

As to staying in your house after bankruptcy, I'm not sure I understand what you mean.  Are you talking about after a foreclosure sale?  If the Trustee doesn't sell your house, you can stay as long as you maintain payments to the mortgage creditors.