Dear Attorney,

Can you explain how the new plan to help homeowners that was announced by President Obama last week will help people who are late on their payments and upside-down?

Karla, Lake Elsinore

Dear Karla,

I can’t explain that right now because it is still unclear. I have heard the guidelines will be out in the first week of March.

It also remains unclear as to whether or not Bankruptcy Court judges will have the ability to modify home loans in Chapter 13.

Dear Attorney,

I am going to file Chapter 7, which will help my current financial situation, but it might always hurt. The problem is that my employer has cut back my hours by 25 percent.

I have a wife and two daughters and one on the way. There is no way I can make it now every month.

Here’s what I want to know: can I keep using my credit cards after I file bankruptcy?

James, Murrieta

Dear James,

Congratulations on the expected addition to your family.

I know it’s tough trying to raise a family with limited resources and there a lot of people out there facing layoffs or a reduction in pay or Advertisement

[ Berry-Bell and Hall Mortuary ] hours or both, but you cannot continue to use your credit cards after you file bankruptcy.

You can’t even use them once you decide to file bankruptcy.

If you have recent cash advances, balance transfers or charges that could be considered "luxury" items, a creditor can file a complaint against you and ask the court to make you pay those debts back.

Charges like this incurred within the 90 days preceding the filing of your Petition are presumed to be fraud and they can allege fraud if they were incurred prior to that.

Once you file bankruptcy, the creditor closes your account anyway.

You can open new accounts after your bankruptcy, but it’s much better to tighten up your budget than it is to incur debt on high-interest credit cards.

It’s hard to do, but budgeting can be very rewarding and it may be the only way for you and your family to make it.

Go down to the bookstore and check out the books available on budgeting. A lot of them include forms that will help you make sense out of recordkeeping, make plans and make the most of your money.