Expert: David - 2/11/2009

Question
I was victim of an 80% drop in income and job loss in the past 3 years. I've been using credit card advances to keep monthly payments up, to the point that I am now borrowing just to pay the card minimums. My question is: if I file BK-7 will I have to repay some/all of the recent cash advances?
My wife also works and between us we can just make the monthly household expenses without the card debt. Cards are in my name only although we do have joint cards with zero balances.
I should also note that all accounts have been paid on time - albeit with borrowed money. I would like to file without my wife since we would be reaffirming any debt she is cosigned on (mortgage).

Answer
Chris,

The trustee may hold you responsible for debt incurred within 90 days of filing.  Just wait longer than 90 days from your last action.

You can file without your wife but keep in mind that her credit will suffer as well because the tradelines reported on joint accounts will reflect the bankruptcy.  This is an inherent risk to joint accounts.

This will work out the best for you if you think about the timeframe that you should do everything in.  The best advice I can give is to do whatever it takes to protect cash flow.  Make sure when everything is said and done you have included enough of your debt that you are in the black again.  The damage to your credit can be very temporary. A little work and you can have better credit than ever after the BK.

It would be a good idea to register at www.financialscoringsolutions.com as soon as your BK is discharged. Feel free to call me if you have additional questions.

David McArthur
219-718-8566
financialscoring@sbcglobal.net