American Express

[Dollar Bill]

Ok....So I have many creditors to pay.

I will be receiving a refinance check that I took out on a rental property. Approx $12k.

I'd like to use some of it. Pay mortgage, insurance etc.

I will also need to pay some creditors as it will look better if I do so.

I owe a American Express $12,000. This is a charge card that is always paid in full. It is 126 days past due. I cannot pay it off by the time I file C7.

Will I be forced to pay the full amount?

If I pay a little hear and there before they close it, will that look better? The debt is over 90 days without a payment.

Any suggestions or insight?

BTW: My BK is for over $700k

[MomIcantFindmy]

Is this a business BK? Paying off all of the Amer X and it is $12K seems like there must be some huge sum of money involved. You need to consult an attorney before yu receive and spend any refinance check or pay any creditors. Just my $ .02

[Ming_Ming_Duck]

I don't know a ton about it, but be careful if you do make any payments to unsecured creditors before filing. I paid off a small credit card (thanks to my mom, who helped out), and thought everything was fine and good, and I could keep that card through the bankruptcy.

When I went to my 341 meeting, I learned differently. I learned that the trustee on my case planned to get that payment back from the credit card company, since I made the mistake of paying an unsecured debt of more than a certain dollar amount too soon before filing. My lawyer gently termed it as "you paid money you didn't need to pay." What this really meant was the money that I paid on that card (with the hope of keeping it, and really, it's a Visa held by my favorite store and I cringed at the thought of not taking responsibility for that debt when I visit that store so often) was being stripped from that card holder to distribute amongst all creditors filing claims.

Pardon me for my rambling message--I took an Ambien so I will be able to sleep with my chronic insomnia tonight, and it's kickin' in quicker than I thought it would!

Why do you feel it will look better if you do pay some creditors before filing? I stopped paying my unsecured creditors about 6 months before filing. Not sporadic payments--no payments. I was given the impression that not paying the unsecured creditors is better when preparing for bk, because otherwise they can question why you have been able to pay them and now can't. And the trustee will watch to see if you pay any unsecured/non priority debts, too, and if you have, the trustee may decide to pursue whatever payments you have made too, and if the trustee gets involved, it's unlikely that the funds will remain with the creditor you intended to pay.

[dp1969]

Ok....So I have many creditors to pay.

I will be receiving a refinance check that I took out on a rental property. Approx $12k.

I'd like to use some of it. Pay mortgage, insurance etc.

I will also need to pay some creditors as it will look better if I do so.

I owe a American Express $12,000. This is a charge card that is always paid in full. It is 126 days past due. I cannot pay it off by the time I file C7.

Will I be forced to pay the full amount?

If I pay a little hear and there before they close it, will that look better? The debt is over 90 days without a payment.

Any suggestions or insight?

BTW: My BK is for over $700k

We made a payment of $4500 to our Visa and our attorney questioned this. We explained that the CC was with our credit union and we have a car loan (reaffirming) with them. We want to be in good standing with the credit union. He thinks the trustee might ask why we paid off one and not towards the others. I don't care...just wanted that one paid in full.

[Dollar Bill]

Thanks to all who chimed in.
I undersand the preferential payment deal, I as more curious as to whether I should pay something. The AMEX is a charge card that is due in full every month. I pay in full every month. 160 days ago I made charges that I did not pay. To this day I have not paid anything. Just wondering about the whole 90 day rule with charging etc etc. It's 126 past due.
I am curious as to whether I will be stuck with paying the balance in full since I paid nothing, or if I should make three payments on it so that there is a chance of it being discharged.

[DontBother]

I don't have an answer to your question... But you may want to be careful with what you do with that $12,000 refi check. At our 341 meeting, the trustee was VERY interested in any filer who got a cash-out refi within the past 12 months. For those few who did meet this criteria, the trustee wanted to review all loan docs associated with the refi, and wanted a detailed list and proof of where each dollar was spent. Although she didn't say it, I believe she was looking for preferential payments... Refi'ing and getting cash-out may not be a good idea when you know you're going to be filing BK.

[Minnymouth]

Is this a business bankruptcy or personal?? Or combined - self employed??

Have you contacted an attorney to see what options are available to you??

Main thing the trustee is going to look at is WHY did you refinance a peice of property, get back cash in the transaction, and now you are filing bankruptcy??? He will want to know WHY you went into further debt if you knew you were going to file bankruptcy.......... creates lots of questions, can cause dismissal of your case.

Any cash on hand you have a certain amount will be exempt in your state..... anything above that you need to spend on insurance, dental, meds, home repairs, auto repairs, groceries, etc.

If you make a large payment to one credit (AMX), the trustee will seize it and divide it among the other creditors also..... so don't bother paying AMEX either....

When you file, all cc companies will close your accounts...... so any money you pay them really means nothing to your advantage unless you can pay them in full (and that could be considered prefrential payment to one creditor).

Have you talked to a attorney???

[EveryDayAdam]

I have to agree with the others. Don't bother paying Amex...They are considered an unsecured creditor just like your regular credit cards. The only difference is the terms of repayment (due all at once, instead of pay-over-time)...In terms of your BK, the fact that it's a charge card and not a credit card don't make one bit of difference.

If you plan on filing for BK, then don't pay any money to any creditors, except for secured creditors you plan on reaffirming (mortgage and car payment)...you're just throwing good money after bad, and it's not going to help your situation in the slightest. Doing anything can only hurt your situation.

If it's possible, back out of the refinance, if not, then put that money towards a necessary expense...like groceries, school supplies, clothes, or even on property improvements to your rental property, and keep the receipts to prove what you spent it on. Definitely talk to your lawyer about ANYTHING you do that involves any loans or moving money...even if it's for only a few hundred dollars...and ESPECIALLY if it's for $12,000. Moving that kind of money around so close to a BK can only cause problems.