Pre filing chapter 7 question

[Anonymous]

Should I stop paying all creditors and stop using all credit cards 3 months before filing?  And If  I become  2-3 months late is that considered a default? Will that show up on my credit report like a default? Im a little confused between the meaning of defaulting on a credit card and If it matters if I am going to file anyways. 

[FireMedic1]

This comes up a lot. And there are conflicting sides. Some say quit paying before filing. Some say keep paying so when you file there wont be any lates on your reports after filing. But you have to pay them all equally so no prefferential treatment is seen. Because no negative information can be placed on your reports after the file date. I side with the pay till filing. The BK will hurt the worst. Why add more damage on top of it. Wish we could have a poll on the site and see who wouldcome out on top. Pay or not to pay. Lawyers arent FICO experts. They side with dont pay so you look broke. I'll stick to my vote.

[twono]

I had the same concern and asked the same question.

Let me put my non-expert opinion on it....Let's say you  have a 700 FICO prior to filing BK and you are current on everything and no derogs on your reports.....clean reports.

You stop paying on everything, 10 credit cards, 2 auto loans, a mortgage, etc....Then you have (10) 30 day lates or 60 days lates on your reports before you even file....So now that decent looking 700 is now a 500.

BK filing date is here, and BAM, your scores go down to 400....

In my case, I have about 35 accts.  Before filing BK 7, scores were tanking from 750-ish to high 600's due to utilization, my reports were clean, 1 inquiry, no new accts in 2 yrs (except for co-sign student loan). I ended up with 2-3 , 30 day lates, just because of how the statement cuts, etc...

After filing, i'm hovering around 600 across the board.  And DC is still 3 wks away.  Reportedly, i can expect a score bump after DC.  So i may be in the 620 range post DC.  I feel that's a pretty good number to be at.

I look at it like this:

BANKRUPTY on Reports = BAD

BANKRUPTCY + a bunch of derogs on Reports = WORSE

[Birdie82]

Here's what I did : I was current on all of my accounts no lates whatsoever , I decided to file in May . I retained my attorney on May 1st with the money that I was going to pay my creditors. My petition was filed on May 21st, I did not get any lates.