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Borrowing and repaying small loan before BK

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Caleb87
New Contributor

Borrowing and repaying small loan before BK

My question involves bankruptcy in the state of: Ohio. So, we are trying to save up enough money for a chapter 7 filing. Of course things are getting tight since i no longer make the money I used to. I've thought about a second job but don't want to risk our BK. It's been suggested that I get a small installment loan like 400 bucks from a predatory lender or that type of places and pay it back before filing (as we have done before) however as I understand it this puts us at risk of messing up our ability to file as it would be considered preferential payment. Am I correct in thinking this would be a bad move?
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FireMedic1
Community Leader
Mega Contributor

Re: Borrowing and repaying small loan before BK

Yes. The trustee could say you paid back the loan but not your creditors. Thats where the preferential kicks in. If its that bad. Try a pawn shop. Its usually $20 per $100. If you dont pick it up in 30 days. You pay the $20 to renew the next 30 days. Cheaper than a loan shark but it doesnt report on your credit file. As a last resort to survive.

 

If you can stay under the means test in your state with a second job. That would be a better choice of course. Above is to put food on the table and gas in the car only.


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