Minimizing Effect Of Bankruptcy

[Anonymous]

Hi All,

I just joined and have been trying to avoid bankrupcy for almost two years now. This is mostly credit card debt and the minimum payments alone are well over 1500 dollars. I finally decided that while I don't want to do this it's best to have this in my past than in my future. My question is that most of my credit cards are current. I have 13 revolving cards and and overdraft from a checking account. My attorney advised me that it might help my score if I can keep up with the minimum payments until my filing. The idea is that if the accounts are current at the time of filing, the creditors can never report them as being late. I still would have all these accounts as included in bankrupcy but they could not be reported as late. Does anyone know if this would help my score very much?

Thanks All

[0REDSOX7]

I wanted to do what you want to do, but couldn't as a few of my cards were AmEx charge cards with over 9,000 due between them.

With that being said - there is a limit, I want to say $400.00 paid to any one creditor during the 60 or 90 days prior to filing and any more than that could be considered preferential treatment and the trustee may request it back.  If you can show that you maintained minimum payments on all of your cards, then the trustee may be okay with that, but there are limits based on BK law.

Equifax and TransUnion delete your payment history once the accounts are updated to IIB and zero balance and but remains on Experian.  Even if you don't keep them current, they will only report 30/60 days late and then get updated to IIB and zero balance so it may not mater.   Some loan officers I spoke with regarding a mortgage told me that they cannot use what your history was prior to filing and discharge, and only worry about what was done since discharge. 

[Anonymous]

Thanks for your input. I just figured that filing now might help as the accounts are current and if I had waited six months many of the creidt card debt would be sold to collection agencys and my report would look a lot more messy. I also have an auto loan that is current and will be keeping Huntington Bank allows me to. And I have Citgo card with a 500 dollar limit that I would like to pay off as it only has a 200 dollar balance on it. Don't know if they will take it away after they find about about my filing but I'm sure the gas card and car loan will help my credit if I make timly payments over the next two years. 

[juggalo9er]

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@Anonymous wrote:

Thanks for your input. I just figured that filing now might help as the accounts are current and if I had waited six months many of the creidt card debt would be sold to collection agencys and my report would look a lot more messy. I also have an auto loan that is current and will be keeping Huntington Bank allows me to. And I have Citgo card with a 500 dollar limit that I would like to pay off as it only has a 200 dollar balance on it. Don't know if they will take it away after they find about about my filing but I'm sure the gas card and car loan will help my credit if I make timly payments over the next two years. 

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i can almost absolutely promise you that this will not make a significant difference in the eyes of any creditor and you are moreless wasting the money paid to them. Amex will likely always remeber if you burn them....most creditors that will accept with a bk on file hardly look at scores....

http://ficoforums.myfico.com/t5/Bankruptcy/should-IIB-accounts-show-payment-history/td-p/3369543

[Anonymous]

Not sure, but I can share my personal experience.

Held on for MANY years trying not to file, ended up in a robbing peter to pay paul scenario that only saw the debt grow and grow. But somehow managed to keep them current hanging on by a thread, convinced I would find a way to pay it all back.  In December the day came was no longer able to pay everyone.  I knew this was the start of the huge snowball effect I was trying to avoid, late fees, higher interest rates, higher minimums, etc, so I finally called the game and went to an attorney.

Had to stop paying in order to pay the attorney and get some money in the bank.  Stopped paying in December, filed in April, discharged this month. Was proactive and answered all calls that started in January telling them we were filing, it was about a week and the calls stopped.  As much as there is shame and emabarrassment and humiliation that comes with this, all that combined doesn't come close to the amount weight that's been lifted from my shoulders that I've carried around for years and years.

This month, same as discharge, I was approved for 2 unsecured cards, one for $3,000 and one for $2,000, and plan to open a secured loan to have an installment on my credit.  I have no idea how my score would've been impacted had I continued to pay through April, but unless you are sitting on a big savings, if it were me, I would stop the payments and start putting away an emergency fund.  It was a scary several months not having our credit card net, AND no savings.

I did not reaffirm my car lease, I am not sure if that was a good move or not, but still paying it and keeping it, but have been informed it will no longer report on my credit even after discharge, so that's something to consider.