About to declare -- questions

[Jesse3581]

Hello,

After fixing my credit, I went too hard with CC and over extended myself within 2 years. I am about to hire a lawyer for Chapter 7.

Mainly, I want to know if there's anything I should be doing.  But I have some questions.

I'd like to reaffirm my car loan with DCU, but I also have a $1900 debt on thier CC. Is that going to affect the car loan being reaffirmed?

I have small balances on Kohl's ($20), Walmart ($200) and Amazon ($10) cards. Along with a small balance on my local credit union CC ($200).  Should I pay these off so they aren't "burned" later on and preserve relationships? My lawyer suggested stop paying on all cards, but that doesn't sound quite right.

I'm still current on all bills, just over water.  What other advice can you give, things I should do/not do in the upcoming weeks. 

[Anonymous]

Your lawyer suggests stop paying on all cards because if you pay one and not another it is considered preferential treatment and could potentially get your BK case thrown out. One thing I did with my FCU is I included them in the BK, but continued to make payments on my car but not my revolving account. After discharge I started payments back up on my revolving account. I was not liable for this account since it was included in BK but they allowed me to pay it off and now they are still working with me, even approving me for a mortgage. In summary, stop paying till after BK then after discharge pay the account off so they don’t feel burned.

[Anonymous]

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@Jesse3581 wrote:

Hello,

After fixing my credit, I went too hard with CC and over extended myself within 2 years. I am about to hire a lawyer for Chapter 7.

Mainly, I want to know if there's anything I should be doing.  But I have some questions.

I'd like to reaffirm my car loan with DCU, but I also have a $1900 debt on thier CC. Is that going to affect the car loan being reaffirmed?

I have small balances on Kohl's ($20), Walmart ($200) and Amazon ($10) cards. Along with a small balance on my local credit union CC ($200).  Should I pay these off so they aren't "burned" later on and preserve relationships? My lawyer suggested stop paying on all cards, but that doesn't sound quite right.

I'm still current on all bills, just over water.  What other advice can you give, things I should do/not do in the upcoming weeks. 

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I wouldn't reaffirm the car, since if something happens to the car or you not being liable to repay the debt is best. You can still keep it if you keep paying on the car. I would ask the credit union if they will cross collateralize the loan. Generally if you got it directly through them vs a dealer and the CU picked it up, it can be cross collateralized and if that's the case you would also have to pay off the CC in order to get your title. The credit union you're with might be different, but at the 4 CUs I've worked for, that's how they did things.

If you want to keep banking with your CU, I would pay the cc off with them so they aren't taking a loss. They will however close your card when they get notice of the BK filing, but you should still be in good standing with them and they wouldn't shut you down.

With regards to your other debt, keep paying on it until you file. It's better to not have any 30 day lates vs having them on your credit along with a BK. If you can stop paying, and file within your 30 day window then that would work, however if you aren't paying for a few months then I personally would pay just to keep my credit as clean as possible.

The smaller CCs you have balances with I would just let them go. Syncrony and Comenity are both forgiving with people who include them in CC so even if you do cause them a loss, it's not like you won't ever get back in with them.