topic Re: Paying minimum payments before filing CH7 in Bankruptcy

Paying minimum payments before filing CH7

ballysdad — Mon, 06 Apr 2020 04:20:05 GMT

Has anyone kept paying bills all the way until filing date? Did trustee ask any payment related questions? Do you think it helped after the discharge?

Re: Paying minimum payments before filing CH7

twono — Mon, 06 Apr 2020 09:11:09 GMT

@ballysdad wrote:
Has anyone kept paying bills all the way until filing date? Did trustee ask any payment related questions? Do you think it helped after the discharge?

Welcome! This has been discussed many many times. Use the search function and you will find many threads on the subject.

i had clean reports up to day of filing. I am 6 months post dc. A month or 2 after dc, my fico scores were 610-630. Many filers start out in the low 500's after dc. Im currently 620, 623, 649 fico 08 scores. Fico 09's are in the 670-680 range.

i look at it like this:

clean reports prior to filing + bk = bad

negative/derogatory reports prior to filing + bk = worse

Re: Paying minimum payments before filing CH7

Anonymous — Mon, 06 Apr 2020 15:42:57 GMT

There are many fans of this approach, but I think making payments on debt that is about to be discharged is silly. Every $ you can save towards beginning a new healthy financial life wins in my book.

I don't think my rebuild was hindered at all by the lates leading up to my BK.

Re: Paying minimum payments before filing CH7

twono — Mon, 06 Apr 2020 16:34:35 GMT

I also think clean reports prior to filing helps when a manual review is done by a bank.

the loan officer can see your excellent credit and perfect payment history for many years and then they can see the one time sudden drop and then the upward spike post dc.

a creditor can see the responsibility you once had before a devastating financial circumstance happened.

years of late payments and derogs could be viewed as simple irresponsibility vs a catastrophic health issue that caused the bk .

this was the case when i was recently approved for a $2500 card with my credit union that i joined prior to filing. As i was sitting there, they pulled up the transunion pull that they used when i joined and could see my great credit prior to filing.

Re: Paying minimum payments before filing CH7

Anonymous — Mon, 06 Apr 2020 17:07:18 GMT

My lawayer advised me to stop paying. I stopped 6 months prior to filing, I did that to be "eligible" to file chapter 7... Well I still had to file a 13 in the end, so I have 6 months of lates on the creditors that I'm burning. I started out in the 700's (720,740,700)

My scores as of today are EX 554 Equifax 554 and Trans 504. We shall see what they look like once I'm confirmed and everything settles.

Re: Paying minimum payments before filing CH7

ballysdad — Mon, 06 Apr 2020 18:38:24 GMT

thats what I am afraid of. Being put in to a 13. I am borderline on means test and think could go either way. Did you pass means test for a 7 then trustee forced a 13? Thank you

Re: Paying minimum payments before filing CH7

ballysdad — Mon, 06 Apr 2020 18:40:32 GMT

My lawyer said it was my choice to still pay. I did not think it was a ch7 qualifier..I guess I should check. I just stopped using my cards and will have 90 days with no usage when I file

Re: Paying minimum payments before filing CH7

Anonymous — Mon, 06 Apr 2020 18:57:02 GMT

I was just under the means test, but I have "too many assets" and etc. My payment plan is proposed to pay $180 a month for 5 yrs. The only good thing about a chapter 13 is being able to purchase a home after 12 consecutive months of on time payments. My MAIN reason for filing was to purchase a home, so... with that being said, I will pay the payments on time, I will be added as AU's on my familys cards, I will get my own secured card with a nice limit (deposit), I will continue to pay my student loan on time, and I will sit on my hands and pray for a 620 or better in 12 months. My lawyer included everything on my credit report as IIB, but most things were closed and PIF months prior to me filing, so I'm in the process of disputing those accounts, plus I have PIF letters from each creditor when I paid the accounts and closed them last year 2019 (filed 3/17/2020). I have lots of documentation (proof) that most of the accounts were not IIB, that they were PIF and closed prior to filing. I even have some creditors reversing IIB on my reports. Example... My BMW X6 was totaled on 1/19/20, my insurance company (GEICO) and my GAP insurance paid it off before I filed. I have all of the documention and a CLOSED & PAID IN FULL letter from BMW Financial. My lawyer included it in my schedule, but BMW knows it was paid off.. they reversed IIB on my reports. I'm praying my documentation helps with obtaining a mortgage. South Florida's rental market is SKY HIGH!

Re: Paying minimum payments before filing CH7

Anonymous — Mon, 06 Apr 2020 20:29:40 GMT

I was current on my bills when I decided to file. I was drowning and barely making it through the month. I remember my attorney telling me, when I met up with him, that it was good that I was still paying on my bills and that I didn't dig myself deeper by not paying them. I get paid once a month, it sucks, but I paid all my bills when I got paid so when I went to file, he advised me not to pay the next months bills. After I filed, I just paid the trustee.

Re: Paying minimum payments before filing CH7

Anonymous — Mon, 06 Apr 2020 22:34:21 GMT

I just filed Chapter 7 and have my 341 this Friday. I paid up until the day I filed because my intentions were not to file. I was drowning in bills due to a decrease in pay and recent separation but had gotten a part time job to try to get through. I I had just paid one medical bill garnishment and then another came through and I didn't know what to do.

I'll explain all of this at my meeting if I need to. I filed pro se, as I have no assets.

Good luck to you!

Re: Paying minimum payments before filing CH7

twono — Mon, 06 Apr 2020 23:17:37 GMT

@Anonymous wrote:
I was just under the means test, but I have "too many assets" and etc.

I had/have 12 titled vehicles, only 1 lien on one of the titles, when i did my Ch . 7 BK asset case. I bought all of them back from the trustee except for the 1 titled vehicle that was repo-ed.

I know it's too late for you now, but man, after reading your story in other threads, i wish you would have been able to have gotten an attorney that would've gotten your 7 through.

You'll be fine though. $180 month and a house in 12 months, pfft...no problem!

Re: Paying minimum payments before filing CH7

Anonymous — Tue, 07 Apr 2020 14:05:16 GMT

@twono - Appreciate your feed back, I wish as well. I'm just trying to clean up my reports the best I can, document everything, and save. Once my MOC and confirmation hearing is over, I'll get the secured card, be added as AU's on my family's accounts, and pray my scores are around 640 this time next year.

Re: Paying minimum payments before filing CH7

Phoenixupward — Wed, 08 Apr 2020 06:16:33 GMT

I agree. Once I decided to file for bk, I stopped paying credit cards except for my student loans and began to have a relationship with cash. The cash I saved from not paying debts that were going to be discharged put me in such an excellent position for wealth management. Not paying credit cards did not hinder my rebuild which was quick seamless. I have continued my wealth management strategy as I'm now 21 months post bk discharge. Filing for bankruptcy is a time to reflect and strategize by developing good money management skills.

Re: Paying minimum payments before filing CH7

twono — Wed, 08 Apr 2020 09:04:18 GMT

@Phoenixupward wrote:
I agree. Once I decided to file for bk, I stopped paying credit cards except for my student loans and began to have a relationship with cash. The cash I saved from not paying debts that were going to be discharged put me in such an excellent position for wealth management. Not paying credit cards did not hinder my rebuild which was quick seamless. I have continued my wealth management strategy as I'm now 21 months post bk discharge. Filing for bankruptcy is a time to reflect and strategize by developing good money management skills.

So by not paying monthly credit card minimum payments for a month or 2 prior to filing, leap frogged you into 'wealth management'? How much 'wealth' were you able to acquire by in those few months?