Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification
It would be possible to go bankrupt on the credit card debt, however if the money was taken out within the last year, it may be suspect, I would consider filling a bankruptcy after one year, and claim the debt as a business debt, so you can discharge it without any issues,
Well, right now I am broke. So if I don't pay on the credit cards, you are saying it is better to wait a year and when they call for the money just say I am hoping things will turn around, and then after about a year, file then?
Yes, if you do not pay, it would take 6-12 months if not longer for the creditors to sue you and obtain a judgment,
so you would have time,
If you file right after taking the money out it could seem as a fraud, and the Court may reject your application, after a year, and evidence that the business did not go through, it would be easier.
I wasn't aware that credit card companies sue to get a judgemnet.
Well, some of the money is for the bar, and some of it is for the alimony that I can't pay. If I wait a year saying I was using the credit card to pay the alimony too, hoping for things to do turn around, and then when they don't I file bankruptcy, is that allowable?
that would be better, also within a year you could try to reduce your alimony by showing you went bankrupt, that would be evidence of your financial distress
Well, if I leave the bar out of it and just link the cash advance to the alimony, would that remove any appearance of fraud? In other words, I took all of the cash out because (in truth) they were offering a 0% interest for 16 months deal on all the credit cards when I took it out, then pay it out over a period of say 9 months, and at that time go bankrupt, would that make the bankruptcy easier as well as give me a better shot at alimony reduction?
It will help, but you will have to show that at the time you took out the debt, your intention was to pay the debt back,
It would be better to claim a business debt, stating you took the money to start a business, and the business loss caused you not to repay them
What kind of evidence would help to show that?
proof that your past business no longer exists,
any efforts you made to start the Bar,
Oh, I see, the idea is that I took out the money to start the bar, with the idea that the bar would be successful, and with the proceeds I would be able to pay off the debt.
So it would have been reasonable when I took out the money that I would be able to repay the debt evenutally.
I wasn't aware that they ask for explanations when you go bankrupt. I thought they just ask about your assets, income, debt, etc.
when their is high debt, the trustee wants to make sure you did not use the money for yourself, and filed bankruptcy to avoid paying the creditor, so a time delay and evidence for the use is needed
Also, by the time I file bankruptcy, I will have been living out of the U.S. for over a year. My understanding is that a locus in the U.S. is needed to file bankruptcy. I have a U.S. checking account, registered to a Florida address. I file my taxes from that same Florida address. So I could file bankruptcy in Florida?
Yes, FL could be your place of jursdiction,
So I don't have to show that I own a house or am paying rent in Florida, just that this is my legal U.S. address (based on my taxes and where my bank account is registered)?
a residence would be asked for, but if you can show you have an address in FL and paid taxes with a license to show the residence, you can show FL residence, a rental or something would help as well.
What do you mean a license to show the residence?
a drivers license, the trustee will ask for forms of ID, a drivers license and social security number to prove residence
Well, that's easy enough, because my driver's license goes to the same Florida P.O. Box that my credit card statements go to. So will that be enough to establish residency?
It should be enough,
A PO box is not great, but it will be enough to show you are a resident of FL,.
And that fact that I am physically living in Nicaragua will not be held against me?
One other perspective. What if I am unable to pay and don't declare bankruptcy? What would happen then?
If they think you have abandoned your residency it could be an issue, you will have to keep ties to FL,
If you cannot pay the creditor would have to find you and try to enforce a judgment, which would be difficult, since you do not live in the US.
Because I would have to be served in person?
I know if I don't pay my alimony, a warrant can be issued for my arrest for contempt of court. Do I face a similar danger relative to credit card debt?
their would be no risk of jail time, if they cannot serve you fro credit card debt
Now, if I don't pay and do nothing, don't declare bankruptcy, what would the process be from the credit card perspective? Would they just write the debt off after a certain period of time?
They would write off the debt, and try to sue you for a judgment,
if they obtain a judgment they will try to collect,
Let's say they obtain a judgement. Could that judgement be discharged in bankruptcy at some later date?
Or must the debt be discharged in bankruptcy prior to the judgment being obtained?
The judgment can be discharged at anytime
So in terms of the whole fraud thing, and since I am living outside the U.S. anyway, with no assets in the U.S., would the lower risk option be to do nothing, and only declare bankruptcy if I decide at some later date (possibly in a few years) that I want to?
I would not pay your debts,
and see if they collect on you,
it would be difficult if not impossible,
if you intend on living in the US in the future, consider a bankruptcy at that point
Is it also possible that they would simply write the debt off without going to court to seek a judgment? The only address they have for me is a P.O. Box, and if they call to harass me and I let them know I have left the country, is it possible they will just give up?
Yes, but typically they sell the debt to a collection agency and the agency will try to enforce or they will settle for 10-20%
I would not tell them anything,
And the idea is that in years, if I want to declare bankruptcy, my creditors would be the collection agencies?
That is not important,
the debt would be discahrged either way, most collection agencies will not attempt an international collection effort.
So to summarize our conversation, my lowest risk course of action, given my situation, would be to do absolutely nothing. And only if at some point I decide I want to, (possibly years down the road), initiate a bankruptcy?
Yes, that would be a good option,
Thanks very much for your help.
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