02-03-2011 07:57 PM - edited 02-03-2011 10:16 PM
My attorney says don't waste my money tryig to make my monthly payments before my BK filing. I've read other attorneys give the same advice, don't pay your bills if you're going to file anyway.
But I've read where people who filed BK said they benefitted by keeping bills paid up until the filing and it hurt their scores less and they recovered better.. Any advice from those who have done either? Thanks. I've been trying from keeping going 30 days late on all my bills and have some due now.
02-04-2011 06:58 AM
I'm a big fan of paying bills anytime including before a BK for two reasons:
1) I just think it's the right thing to do. I slept better at night knowing I had made my best effort to pay the debts I had obligated myself to. I threw as much cash as I could into paying the folks I owed. I definitely went without things I would have liked to have spent my cash on 'cuz I had promised that same cash to someone else. I slept better then, and I sleep better now - years later. My attorney did not understand my thinking - but it's not his sleep I was worried about.
2) My FICO's are pretty decent. A few months after CH 13 BK discharge, my EQ FICO was 717 and my TU FICO was 741. The BK is the only baddie on my report.
Best wishes to you!
02-05-2011 09:18 AM
I have the exact same question.
My FICO score is 691 as of today. I have never been late once on a payment, That's why it's as high as it is, but I am planning on filing for BK7 in the next few weeks. I got into a great deal of debit (50K) trying to finish up schooling and start a business which hasn't worked after a few years of trying to stay afloat. I've been near drowning for a long time and after a lot of hard thinking, just don't think I can pull myself out.
My question is...my lawyer says that once I decide to file, I stop paying, but that I can wait a few months before I file to save up some money. ( I need to move and afford likely double deposit on a new rental place- I"m curious too about what people have encountered early post BK in the difficulty/ease of finding people willing to rent to you).
I wonder though if not filing immediately will have an even worse effect on my credit long term. Obviously I'll take a huge hit on my FICO scores with a BK, but would it be slightly less bad if I was current on everything and then filed for BK with everything still current?
I'm trying to do this the smartest way possible now that I've gotten myself in to this mess.
Thanks, everyone, for your help. I've learned a lot in the last week reading up on these forums.
02-05-2011 02:13 PM
FWIW, I paid mine up until the day I filed. Not sure of the improved FICO after the BK debate but, I figured after the BK you will have all the money that you would normally paying in your pocket anyway so why stop paying now just to file next month? Just file now. I sort of proudly say that I wasn't wasn't late on on bill when I filed. I know it's a oxymoron but it makes me feel better about filing.
02-06-2011 01:53 AM
I filed forChapter 7 Bankruptcy and I wanted to make sure that I had still had a credit card when my bankrtupcy was discahrged. But, I owed very little on the account. It was worth it.
But, remember you are filing bankruptcy for financial relief. And you are able to keep some money in your checking account. Ask your attorney how much you are allowed to have in your account.
I think there might be some truth to your statement about making payments up to the time of filing your bankruptcy might improve your credit score. That's because they account these account as being included in bankruptcy and the also report 30 days, 60, days 90 days late on each of the acocunts I believe that might impact your score for about thee years. I hope my example helps you.
02-10-2011 07:47 PM
I would agree with moderator about paying up as much as you possible can before filing. You’ll feel that much less guilty about the entire BK process then.
02-11-2011 09:31 PM
My filing occurred on Thursday of this week. Twos days before my filing, I paid my last bill. I went into BK not being 30 days late on any bill but one, and that one 30 days late occurred the day of the filing. I would have paid that bill but it was a couple of hundred dollars, and I really simply didn't have the money to pay it. That's why I'm declaring BK, because I no longer have the money to pay my bills.
So even though I will have entered BK with only two lates of 30 days that date back a couple of years on my credit report, plus the one that occurred this week, and a decent credit score, from what I've read here by the time I'm discharged I'll have a slew of lates, because between the time I file and discharge I'll be reported as late. I will be diligently challenging that information on my credit report, though it doesn't sound others have been very successful at doing it. My understanding is that when I file I should not be counted late for any future missed payments.
I feel that I haved failed terribly, but I don't feel quilt, as someone here suggested I might. I had near strokes each month digging for pennies to pay bills. I have long been unemployed.. Five and a half years ago, I had close to zero debt and a top credit rating and decided to back to grad school and quit my job so I could move to another city and attend a top university. I ended up in school longer than I anticpated and started using some of my $40k credit line to live on. I never got a job after I finished school and my debt on my cards climbed to $39k, which was used to pay my mortgage, to live on and cash advances to keep the bills paid. I still don't have a regular job but do odd stuff and make very little. I had paid the debt down to $30k when I filed. One reason I dont' feel quilty is I did everything I possibly could not to file, including selling whatever I could and living a barebones existence. I simplly no longer had the money to pay the bills. I had about 10 accounts. Even though I had never been 30 days late they had all rasied my interest rate to 29 percent based on my iowerd ratio of available credit. The rates were raised before the change in credit card laws. Those high interest rates contributed significantly to my problems. My payments were equaling the interest charge.. ( I was able to negotiate some of tthe interest down later.) I figure I paid more than $40K to pay down $9k of debt in about 3 1/2 years. I have a lot of bad feelings, particularly a sense of great failure, but I don't feel guilt. I'm relieved now that I've filed and will be focused on trying to recover from this signficant event. This excellent forum has shown me that people do recover. I still have $60K in student debt. But that's at 6 percent interest, and it doesn't feel as hard to handle as the credit card debt.
02-12-2011 08:54 PM
I've been reading posts on this forum that after BK people who were not late on their accounts at the time of fiiing their credit reports now show accounts as late and derogatory. They apparently got no credit for paying on time all those years. I don't see why pay up to BK if ithe good payment record is all going to be wiped out. It's one thing if you have the money, sure pay. But most people filing BK are filing because they don't have the money to pay. I know I made a payment two days before my fiing and I absolutely could not afford to do it. And in fact it caused an overdraft on my checking account. But I did not want to go 30 days late. What did i accomplish? Nothing! It was really not smart of me. Now I see why attorneys say if you're going to file BK don't waste your money and keep paying the bills. All the good will be turned to bad anyway. That's the price of BK.
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