Stipulation and preferential payment question

[Recessionist]

I am planning to file Ch. 7 in the next 45 days, or sooner. I have TWO creditors who filed suit last year when I was working, and I entered into stipulations with them. Now that I am unemployed, I can no longer afford to pay them every month, and I haven't been paying any other creditors for about 18 mos, save for the overdraft line of credit on my checking account.

I negotiated with one of them to lower the payment and paid them, before I was certain I was going to file. I want to see if I can pay the other just once more before I file because I do not want them to proceed with having the stipulation filed. Is this considered a preferential payment?

And if it IS considered such, will I be in trouble for paying them, or is this normal?

ps. I have NO assets aside from a small amount of cash which will be pretty well used up before I file.

[keepmine]

If these are debts that will be discharged, stop paying both of them. The automatic stay you receive when you file applies to stipulated judgments/settlements. You're wasting your money.
If it is a preference payment, it won't mater to you. The trustee will step in and demand the money back from the creditor. I'd suggest you list the creditor who you paid in full on the bk petition just in case it's a preference issue.

[Recessionist]

I believe both will file the stipulations and get judgments BEFORE I am able to file, and this is what I hope to prevent. Yes, I know I am protected after I file.

I haven't paid anyone in full - just negotiated a lower monthly payment.

[2Bshinyandnew]

And if it IS considered such, will I be in trouble for paying them, or is this normal?

Debtors do not get in trouble for making preferential payments. It is more of a hassle for the creditor. The "trouble" happens if a preferential payment was made to a friend or relative and the bankruptcy trustee goes to recover the payment from the friend or relative.

See:

http://www.moranlaw.net/planning7.htm#Anticipating%20avoidance%20actions

"It is not wrong for the debtor to make payment to one creditor over another on genuine debts. It is the creditor, not the debtor, who stands to lose if the trustee elects to avoid a payment as a preference."