Considering BK, when to stop payments

[Stryder]

I havent been on the board in awhile.. I am unfortunatley considering tanking everything I have built. My wife lost her job some years back and I have worked extra to make up for it and used the cards somewhat to get us through for the time being. Now with the pandemic bs, inflation, some consolidations loans, and having to lean on my cards more and more, things have gotten to the point where I am upside down and burning through my savings.

I have done everything I can to make ends meet, but I know I will eventually run out of resources and will have to start defaulting... now with no money and I assuming once I start defaulting, the other cards will start not approving new charges?  Once I get a 30 day late, wont the others freak out?

What I am leary of is stopping the payments. I am totally current on everything right now, but not paying anything for 4 mos before DC is frightening.

Thanks in advance!

[FireMedic1]

Sorry it had to come to this. Once filed all accounts will be shut down. The ones listed below you wont see for years to come. NFCU once paid back will let you back in with the nSecured. Chase, AMEX & BoA. Kiss them goodbye. Now on to the lates. Since you wont be seeing the big boys again. Having lates wont mean much. Or. Keep paying for future creditors to show you stayed on top of your credit till the end. Majority will say just quit the bleeding. The  price sounds right. The file fee is for the courts, not the lawyer fees. Mine was $2900 in Fl. Went with a board certified lawyer since it was the IRS mostly. Didnt want a hiccup with them. But once rebuilding starts. You can get back on top without the big boys as I did. To me its just a name. Just give me the perks for using the card. Once you walk out of the MoC. Its a sigh of relief. Its done. All that extra $ can go to savings and not interest paid which you wont see any longer. Its all yours now. So yes there is a bright side. I just posted yesterday I passed 100g's in TL's. (Not to brag) I wouldnt let 5g's post to pay interest on. I was AZEO the entire time. But its a game to play the rebuild recovery steps. Best of luck. Keep us updated.

[WildestDreams]

Not sure it helps I'm in similar place, about to file, never late, not behind currently scores around 700 - attorney told me the same stop paying now and it won't effect anything  hard to do right? 

[zerofire]

Before you go through with this you should consider the consequences. First the obvious ones where you will get your score trashed, and any accounts that currently have a balance will be closed. Next you will lose access to the lenders that you have right now to the point that you will have to beg to be let back in if you still want even a small amount of credit and this will be with toy lines plus possibly secured. Think no Chase(10yr, No BK showing plus Repayment), AmEx(7yr-Never plus Repayment), BoA(4yr-Never), NFCU(Really long time plus secured-Never). Capital One will probably be the first to forgive you after maybe 4mo after discharge if your lucky. Next you will want to understand secured lines. Now the obvious point is that with a secured line there is physical collateral backing the credit line. Now when it is a bank it is easy and obvious but with a credit union not so much. Almost every credit union worth their salt including NFCU uses a cross-collateral clause. Anything under the credit union management is used to secure any loan you get. If you fail to pay NFCU they will pay themselves from your checking account. If you file a BK they will take all funds in checking and savings, including the $5 share, up to the amount you owe them before writing the rest off. You will never bank with them again until you have paid off everything you owe. My suggestion is to tell your wife to go job hunting as there are plenty out there and not enough people plus that would be the easier solution.

[EquityinScoresNow22]

First off, sorry you have found yourself in this situation. Life does happen! When the wife and I filed back this past January, we had ZERO delinquent payments. So I guess it just depends on the timing. I too thought everything had to be delinquent before filing but our attorney told us that's not the case. We're almost three months in and recently surrendered a vehicle (we have 3 others). We appear to be on a good path to receive the DC and the much needed fresh start. I hope things turn out in your favor. Keep us posted!

[Stryder]

Very, very hard...

Thnx for the post

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@WildestDreams wrote:

Not sure it helps I'm in similar place, about to file, never late, not behind currently scores around 700 - attorney told me the same stop paying now and it won't effect anything  hard to do right? 

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[EquityinScoresNow22]

Just wanted to add that some may say consider the damage to your credit and some may even discourage from filing. I tell you, when you think about it, the negative impact is short-term. BK really doesn't stop you from doing anything although it may delay some plans. Some people have even stated that their scores INCREASED immediately upon filing. Your score will recover over time. You will have car dealers sending you marketing to buy a new car almost as soon as you file. You will most likely qualify for a mortgage within 24 months. It does not ruin your life. It is a "tool" to use that is perfectly legal and legitimate. Don't get caught up in the supposed stigma of filing BK. It exists to use if you need it. Best!

[ballysdad]

I kept paying did me no good.. still shows derogatory on all accounts with 0 missed payments on some and 11 lates on the others. I never paid any bills late and paid up to the day I filed. Wouldn't pay like that if I had to do it over. Just my 2 cents

[krielly]

All accounts will show derogatory once you file, however I would dispute accounts showing  with lates if there were in fact no late payments. 

K

[masscredit]

Something that I did was look at my budget what my budget would be if I no longer had any credit card payments. Your balances keep climbing the more that you use the cards so your minimum payments keep getting higher too.  Take out the credit card payments and fine tune your budget to the minimums. I found that really paying attention to my spending allowed me to control it better. For example, instead of just spending money freely when I got out (like for nights out to dinner or entertainment), I allow myself $100 per week for spending money. I'm good with staying within that. Over the Winter, I made it a point to not spend money. I got it down to $100 some months. I let the extra build up. So now that it's nice out, I have a nice coushin to do more of what I want.  I'm conservative with electricity, I watch how much I spend for food, I'm realistic with other expenses like car inspections and school pictures for the kids so I budget money for things like that. I pretty much know, also to the dollar, how money money I will have in my checking account at the end of the month.

As for when to stop payments... When you know... you know. I got to the point where I did the budget thing about and knew what I had to do. It was a huge relief to not have to put out that money to pay the cards anymore. It was eating up my savings. It felt like a breath of fresh air after that. My finances went from being in a nose dive to a slight improvement each month. 

You'll probably start receiving phone calls to remind you to make a payment after they go 30 days late. The absolute BEST thing that helped me avoid dealing with that is the Silence Unknown Callers setting on my iPhone. The BEST!!! I went 14 months before I filed. I never heard one call from a creditor. Some leave messages that I deleted. I never listened to anything. Any main that I received from a credit went into a bag. I only opened 2-3 pieces that kind of looked important. One was a registered letter and one was when I was served by Discover. I pretty much just went most of the time with blinders on. I just did my thing and avoided the noise of them trying to contact me.