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  1. #1
    Join Date
    Apr 2009
    Posts
    3

    Default Loans Incurred While Still in Bankruptcy

    My question involves bankruptcy in the state of: Texas
    I filed chapter 13 in Texas/Harris County in 2010 through a bankruptcy attorney. I am and have been current with my monthly payments. I am retired, my income is Social Security and a part time job which are sufficient to pay my normal monthly living expenses and the bankruptcy payment.

    In June 2011 I was in an auto accident, other driver 100% at fault as determined by his insurance company. I entered into a contract with a personal injury attorney to handle this matter not knowing I needed first to let my attorney know and get approval from the Trustee. The PI attorney has been working the case, does not plan to go to litigation but settle with the insurance company. Yesterday is when I learned I cannot enter such a contract without first informing the trustee. The PI attorney immediately canceled/voided the contract waiting on further instructions from the bankruptcy attorney. I have provided the bankruptcy attorney with all the related information.

    If I were not in enough hot water with the bankruptcy attorney and the trustee regarding the auto accident matter, I realized I probably need to inform the bankruptcy attorney about another violation on my part. My income is sufficient to pay my regular monthly living expenses and the bankruptcy payment. For unexpected expenditures, I had some cash put aside. Beginning last fall I was having more of these kind of expenses than expected and ran out of my back up cash. I made a big mistake by taking out a payday loan and paying extremely high interest. The loan needs to be paid back and when there is no cash then another payday loan was taken out and this continue until now I have about 10 of these loans I can’t pay. I will shortly send an email to the bankruptcy attorney telling him about these loans. I can understand and expect him not to be very pleased with me and the same from the trustee.

    The auto accident happened before I started having problems with the payday loans and I was hoping that there would be enough in the settlement that I could pay the payday loans off and I would not ever start another one. But now the settlement is on hold depending on the action by the trustee.

    I accept responsibility for what I have done and was not trying to avoid providing information to the bankruptcy attorney or following the instructions from the trustee.

    What will happen to me at this point? I expect the worse, i.e. the trustee will probably submit a motion to dismiss my bankruptcy and I will on my one be facing the creditors from the bankruptcy plus the payday loan creditors. I will just have to do what I can do.

    Thank you.

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Loans Incurred While Still in Bankruptcy

    You need to work this out with your bankruptcy lawyer.

    How big will the anticipated settlement be, relative to your debts?

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