Can I continue to pay rent and not pay my credit cards?

[Fminus]

Hey BKForum,

Feels a bit weird to be posting here, as I never thought I would have to consider this option. Basically, if I stop paying my credit cards (2-4 months) and continue to pay rent, will the rent payment ($900) be considered preferential payment when I go to file for Chapter 7?

Thanks

[krielly]

No. Your rent is not considered a preferential payment. If you had a mortgage and/or a vehicle (secured debt) you wished to keep, those would not be considered preferential either.

[Fminus]

No. Your rent is not considered a preferential payment. If you had a mortgage and/or a vehicle (secured debt) you wished to keep, those would not be considered preferential either.

Thank you very much for the information. I'm sure there will be hundreds of people asking the same thing on Google, and know they know where they will find the answer in this thread.

Regards

[LadyInTheRed]

The reason paying rent is not a preferential payment is because you are not paying an "antecedent debt". You are paying in advance for the right to live in the home. It is a "contemporaneous exchange for new value". It is also a payment "in the ordinary course of business or financial affairs" of you and the landlord. The quoted terms are directly from the Bankruptcy Code: https://www.law.cornell.edu/uscode/text/11/547

There is nothing to feel weird about. You are making a personal business decision that many good people make every day.