Is there any law that says you can’t cash out all your lines of credit+cards and then save the cash in a box?
Right now I have $150K of available credit through a variety of sources. My good credit score is about to be trashed because I can’t afford my mortgage reset after 5 years and there is negative equity in my home so I can’t refinance. Since my credit score will be destroyed can I cash out the $150K since the damage is already done? How long will it take for the debt to be discharged from my record? If I keep the cash in a box and don’t declare bankruptcy to say that I don’t have the cash, what is the worst that can happen to me?
July 8th, 2009 at 12:16 am
You would have to file bankrupcy, and questions would arrise about what happened to all of this money. You would end up having to pay it back through garnished wages, probably for the rest of your life. What you are talking about doing is no better than robbing a bank. That is taking money with no intention to pay it back. Im glad they made the bankrupcy laws way stiffer a few years ago!
July 8th, 2009 at 5:39 am
jail if you are found out — plus you have to live with yourself and on top of it you are only adding the the problems the US already has — think if everybody followed your idea. Shame on you.
July 11th, 2009 at 2:08 pm
You just asked this question and got a bunch of answers…why not read them? It’s fraud, and possibly even theft to do what your asking.
July 12th, 2009 at 6:01 pm
The credit card companies can and will enforce a judgment against you forcing you to pay back the debt and attaching any assets you have and part of any future income you make. If you do not have any assets available, you will be FORCED into bankruptcy by the court. Also, since there is evidence that this money was advanced to you, you will have to prove that you spent it or you will be forced to turn it over. If you fail to do so, you can be charged and sentenced to jail time. What you are contemplating is nothing short of outright theft.
July 14th, 2009 at 8:35 pm
This sort of financing only works for governments. You will go to prison for fraud is my guess.
July 16th, 2009 at 1:23 am
Fraud charges and repayment including the high credit card interest rate.
July 18th, 2009 at 8:20 pm
The damage isn’t “already done”. Just because you have one problem doesn’t mean that compounding it is a good idea.
July 19th, 2009 at 4:35 pm
Why don’t you do this instead of committing fraud (fraudulent transfers would not be discharged in bankruptcy anyway).
Go to your bank and TALK to them. Tell them that it is impossible to afford your newly adjusted mortgage payments and see if there is anything they can do to help. Take figures with you (e.g. I mean money coming in versus money going out to show them you are not crying wolf).
Lots of people just give up when their teaser ARM goes and and trash their credit. After that happens, the bank, most of the time, won’t talk to you but if you go before you start defaulting on payments, they may.
Don’t feel alone because many people are in the same boat. Take positive action!
July 22nd, 2009 at 6:10 am
It is very unlikely that you will be able to “cash out” on all sources before they get wise to you. But if you did–
You can be forced into involuntary bankruptcy by your creditors. There will be a “debtor’s examination’ where you testify, under penalty of perjury, regarding all of your assets, cash and otherwise.
Either you tell about the cash and it is then used to pay some of your bills, or you lie and end up in jail for bankruptcy fraud.
Even if there is no bankruptcy, there is a concept known as ‘fraudulent conveyance’. Sooner or later that money will be spent somewhere and you will be sued for fraud and other nasty stuff.
Don’t make a bad situation worse. These days, the banks are overwhelmed by possible foreclosures. They really don’t want all those houses back. Work with your bank, a realtor and a lawyer to find a legal and ethical way to deal with this problem.