Paying CC's on time before filing

[Ridbidge]

Good Afternoon! I've learned a wealth of info on this forum this week and thank you for it. I will be filing a CH13 on 4/24 as I am being made to wait by my lawyer as I purchased a watch on 1/23 and he says I should wait 90 days. My question is this... I currently have a clean credit report with no baddies of any kind. My lawyer said to stop paying my CC's "unless I liked burning money". I am hesitant to do that, but I DON'T want to "burn money" so should I really stop paying them when I'm over a month from filing? Is there any advantage at all of having no late payments on anything prior to filing?

[bcss]

Good evening. Listen to your lawyer. Don't worry about your FICO score now. When you come out of BK worry about. If you have extra money stock your pantry or ? Good luck...

[keepmine]

Your lawyer is correct-it's a waste on money.
Your Chapter 13 will be a 5 year plan. Those 30 day lates will be so old when you're discharged they really won't mean very much.

[Ridbidge]

Your lawyer is correct-it's a waste on money.
Your Chapter 13 will be a 5 year plan. Those 30 day lates will be so old when you're discharged they really won't mean very much.

Thank you both for your reply. It makes me feel a bit better. In the time between when I made the posting and now when I read the replies I broke down and paid two payments (one was due today the other Monday) totaling $236. Oh I just need to let go!!! It makes me so nervous!

[AngelinaCat]

Yes, listen to your attorney.

Once you have decided to file, continuing to make payments to unsecured creditors, such as CCs, is like flushing the money down the toilet.

Instead, take those payments that you are making each month, and put that money into an Emergency Savings Fund.

Forget that money exists! If you are disciplined enough to have built this fund up substantially over the months, and NOT TOUCH it, you will be very pleased when the hot water tank goes out, or a major repair to your house or car comes along that you had not planned for.

Good luck to you!

[Ridbidge]

Yes, listen to your attorney.

Once you have decided to file, continuing to make payments to unsecured creditors, such as CCs, is like flushing the money down the toilet.

Instead, take those payments that you are making each month, and put that money into an Emergency Savings Fund.

Forget that money exists! If you are disciplined enough to have built this fund up substantially over the months, and NOT TOUCH it, you will be very pleased when the hot water tank goes out, or a major repair to your house or car comes along that you had not planned for.

Good luck to you!

If I manage to save up 1 or 2 thousand dollars by the time of the 341 meeting or even after, won't the trustee want to take it all away?

[andy158]

Save what you can by NOT paying those cc's. Put it in a safe deposit box or even under your mattress. This will be the beginning of your emergency fund. You are allowed a modest amount of money in the bank (you still have living expenses) and the trustee won't "take it away", but I wouldn't load up an emergency savings account with thousands of $$ until you are confirmed and start your plan payments.

As you have probably read here an emergency savings is vital to the successful completion of a 13. I can't stress that enough.

[Ridbidge]

Save what you can by NOT paying those cc's. Put it in a safe deposit box or even under your mattress. This will be the beginning of your emergency fund. You are allowed a modest amount of money in the bank (you still have living expenses) and the trustee won't "take it away", but I wouldn't load up an emergency savings account with thousands of $$ until you are confirmed and start your plan payments.

As you have probably read here an emergency savings is vital to the successful completion of a 13. I can't stress that enough.

How much money would be considered a safe but adequate emergency fund?

[tobee43]

depending on your circumstance,there is was an advantage, at least there was for us, although our atty said STOP paying them all. so it is no surprise your atty told you that. we paid right until the very last second. why? well, at that time i had too much of a moral issue, (that's since flush down the pot), however, i was thinking about it really hard and know that until one is usually 90 days late it's not reported. WE DID NOT HAVE A ONE delinquent account when the stay was put into place, other than our mortgage which we had already vacated the premises a couple years prior. it really helped us build our credit much sooner, although, most of any of CC debt we had was for medical bills and i just didn't feel in my heart i could just leave them dry. we only paid the bare min one the cards. we stopped our mortgage months before and put that money away for our move. while you are 13 i'm not certain how that we reflect one way or another, we were a no asset 7, and by far our credit scores now are in the 700's. not that we really cared that much at the time. but it certainly worked out well for us, it just didn't get the CCs time to report any late payments.

as for how much money is adequate? well, that depends on your personal financial situation. we had to save for the move, so what ever i didn't pay, especially our mortgage, we socked it away under our bed. no BANKS!!!

others will advise and most advise just stop paying them. so it's really a matter of opinion, while it may make more good sense to NOT pay them while one plans a 13 as opposed to the 7.

[LadyInTheRed]

The trustee will not take the cash you save before filing as long as over the life of your plan unsecured creditors receive an amount that is at least equal to the non exempt portion of the cash.

[nsupanda]

I was ALWAYS on time to my creditors, but I did stop paying them about a year before I finally filed CH 13, per my attorney's advice. I was very hesitant too, and the first two months of not paying just made me crazy... but it all worked out! You might want to pull the phone cord out of the jack though. They will bug the crap out of you.

[nsupanda]

And I'm with the others: the money you would be paying to your creditors, put it away for the many rainy days to come. Although I can't find anywhere on the internet that says it's illegal, I've always been told (I worked at a bank for many years) that it is illegal to store cash in a safety deposit box. But do it anyway. The bankers will more than likely not see what you put in there.

[LadyInTheRed]

And I'm with the others: the money you would be paying to your creditors, put it away for the many rainy days to come. Although I can't find anywhere on the internet that says it's illegal, I've always been told (I worked at a bank for many years) that it is illegal to store cash in a safety deposit box. But do it anyway. The bankers will more than likely not see what you put in there.

There is no reason the OP can't keep cash in a bank account, as long as he/she doesn't have a loan at the same bank with a cross-collateralization clause and as long as he doesn't bank with Wells Fargo. The creditors aren't going to get judgments before BK is filed, so there is no risk of garnishment. The cash must be reported as an asset on the BK petition whether it is in the bank, in a safe deposit box or under a mattress.

I can't find anything about a law against storing cash in a safe deposit box either. I found articles saying it's not a good idea because the contents of a box is not FDIC insured. I would think those articles would also say it's illegal if that's the case. It is more likely bank policy and part of the rental agreement for the box. The bank would prefer you deposit cash in an account where it will make them more money than you pay for a safe deposit box.

[tobee43]

i really understand a bit better now. it doesn't matter than you stop paying although i check my cc report today and while all my ccs are IIB it only shows in the date column the last time you paid. my shows i was paying until the month i actually filed. end results are all the same IIB and BK just wipes it all out. although i'm shock to now see my credit scores in the mid 700 close to upper 700s did that help that i keep paying? really not they ALL get IIB no mater what.