QUESTION
When to stop paying creditors before bankruptcy?
Asked on Apr 02nd, 2013 on Bankruptcy - Delaware
More details to this question:
I would like to know when I can stop trying to make payment to my creditors before flying bankruptcy. And also is it okay to let them go into collection and then make little payment to them until my bankruptcy.
10 ANSWERS
Bankruptcy Attorney serving Concord, CA
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William Rubendall Attorney at Law
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If you are definitely filing bankruptcy don't pay any of your creditors except for things you are keeping, such as a car or computer.
Answered on Apr 03rd, 2013 at 5:25 AM
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If they are unsecured creditors you intend on discharging in the bk you can stop paying now. It doesn't matter if they go in collection. However, once they file suit they can obtain a judgment and begin garnishment.
Answered on Apr 03rd, 2013 at 5:25 AM
Trusts and Estates Attorney serving Jacksonville, FL
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Law Office of David M. Goldman PLLC
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Our office usually advises 90 days of non-use of the cards before filing the bankruptcy. As for when to stop paying, I would recommend that the moment you decide to file a bankruptcy, your use and payments should cease. Those monies could be best spent on hiring your bankruptcy attorney!!!
Answered on Apr 03rd, 2013 at 5:24 AM
The answer to your question depends on a lot of different factors, but generally speaking, once you are committed to filing for bankruptcy, it does not make sense to continue paying creditors who are subject to the bankruptcy discharge.
Answered on Apr 03rd, 2013 at 5:24 AM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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Possibly, but it depends on the type of debts. Please understand that filing for bankruptcy is a very complicated process. It is wise to talk to an experienced bankruptcy attorney before deciding to take this important step.
Answered on Apr 03rd, 2013 at 5:23 AM
Deborah F. Bowinski
This is a great question, but the answers may well depend upon the type of debt and your anticipated time frame for filing your bankruptcy case. You should consult with your lawyer who will be better able to advise you. This general forum is not a good place to seek specific legal advice since there are too many unknown facts.
Answered on Apr 02nd, 2013 at 9:13 PM
David John Tybor
This depends on how aggressive your creditors are. Typically, you would stop paying at least 90 days prior to the filing. You want to prevent a judgment and garnishment of your wages while you are waiting to file your bankruptcy. However, there are some creditors that can garnish your wages without getting a judgment through the courts. For example, some student loan creditors can garnish your wages in this manner. Also, if you owe the IRS, they do not have to go to court to garnish or attach to your assets or income.
Answered on Apr 02nd, 2013 at 9:00 PM
It is a balancing act. The longer you go without paying your creditors, the lower your credit score will be when you file bankruptcy and the longer you will have to deal with the annoying phone calls and potential collection actions by your creditors. On the other hand, paying creditors after you make the decision to file is sort of like putting your money into a shredder. Just be sure not to take out any new debt so you can pay off old debt and instead save your money to pay those legal fees and court costs for your bankruptcy.
Answered on Apr 02nd, 2013 at 8:43 PM
Estate Planning Attorney serving Wilmington, DE
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Reger Rizzo & Darnall, LLP
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Yes, but keep in mind better to file before they file suit against you. If unsecured and you file a Chapter 7, they will all be discharged in the bankrutpcy, but more work if they file suit before you file.
Answered on Apr 02nd, 2013 at 8:15 PM
Bankruptcy Attorney serving Atlanta, GA
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Saedi Law Group, LLC
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If you plan of filing for bankruptcy then the only creditor you must pay are your secured creditors on items you wish to keep (like your home and your car). Since you are getting rid of the rest of the debt any payment you make on these debts before filing is money that you could save back and pay towards your secured debt.
Answered on Apr 02nd, 2013 at 8:15 PM