Why wait until my credit is bad to file?

[casper11]

I am very new to this forum but I have a quick question: Is there any advantage to filing before a single payment is late? Why do I want to let all those collection agencies have a field day? I have never missed a payment in my life but I do not see any light at the end of the tunnel. I am freshly disabled and cannot borrow from my business lines of credit much longer. Sooner or later I will be forced to bankrupt my small company and that will force my wife and I to file also. let's say I simply stop borrowing and stop paying the bills and they go for collection. Does chapter 7 remove the collections from my credit report or am I better off surprising my creditors before I am late on any of my payments??

thanks for any help,

casper

[Cali]

I stopped paying my credit cards in February, I filed last week. I had 4 calls(none were collection agencies) and I received a lot of mail(still no collection agencies).
And before this happen I had 20+ yrs of perfect credit.

I am very new to this forum but I have a quick question: Is there any advantage to filing before a single payment is late? Why do I want to let all those collection agencies have a field day? I have never missed a payment in my life but I do not see any light at the end of the tunnel. I am freshly disabled and cannot borrow from my business lines of credit much longer. Sooner or later I will be forced to bankrupt my small company and that will force my wife and I to file also. let's say I simply stop borrowing and stop paying the bills and they go for collection. Does chapter 7 remove the collections from my credit report or am I better off surprising my creditors before I am late on any of my payments??

thanks for any help,

casper

[lrprn]

Casper, I deleted the duplicate thread you posted that asks the same questions as this one. It's against our forum rules to post the same thing in different forums. It's best to keep all answers in one place, plus you'll get better and more answers this way.

[southernbelle]

In my opinion, it depends on your situation. If you aren't late and have the money to afford a lawyer, then file when it's best for you. You don't have to wait until you are behind on your payments to file, but most of us do because it is adventageous for us to so.

Most of us need to stop paying unsecured creditors to be able to afford an attorney or make ends meet. The thinking is, why continue to pay creditors that will be discharged anyway when we can use the money to pay our bills, gas up our cars or feed our children.

From personal experience (I stopped paying cc's in October 07 and filed in April 08), serious collections don't start immediately and most creditors will call or write you first. Your credit will suffer because my scores dropped significantly, but if you've met with an atty and now is the time I don't see any reason why you should wait. If filing now works for you, then I say do it. Everyone's situation is different.

[Odie]

This is pretty much what I did. I missed a few payments in the couple weeks between first meeting with my lawyer and filing, but up until that time I was current.

We were fortunate enough to have set aside some of our tax return to create an emergency fund, which I then used to hire my lawyer. But if you don't have the funds out of pocket, a good way to save for one is to stop paying on your cards, and set aside what you would have paid on the minimums in a savings account, and then when you have enough money to file do so.

[Stilltheone]

When we filed, we were about 2 weeks late with our Chase bills....that was it.

Why did we file? My husband got a salary cut, totalling $25K for his yearly salary. We knew we weren't going to make it with that kind of cut...so we filed.

Good luck!

[AngelinaCatHub]

[Cali]

The reason we filed was because we went from a high 6 figure 2 income home, to a 1 income home with the same bills.

The reason I stopped paying was because I knew I was going to file and my attorney suggested I stop.

ETA: And the reason I waited until June to file was because I had a cash advance that I needed to let age.

[PaKettle]

If you have not made any big transactions in the past 90-180 days and if you do for sure past the means test, then there is no reason to wait. It will help you to rebuild your credit if you dont' have a lot of 90+ days late red marks on your credit report.

Most of us had to wait due to having made a big balance transfer, or waiting for our income to average out to a lower figure to pass the means test.

One might wonder if you were paying your bills just fine and suddenly you file bankruptcy with no period of not paying bills, how is that you could pay bills but suddenly could not? If you can answer that question easily and still qualify via the means test, then by all means do not wait, file now. Ask your attorney to be sure.