When should I stop paying my creditors?

[swampwiz]

I'm wondering about this. I guess I'd like to know that if I plan to file bankruptcy at some time in the future, how many months before that can I stop paying creditors? Or alternatively, how long after I would stop making payments that the creditors would be able to force me into bankruptcy? This seems to be important because I want to be able to wait until a certain time before actually declaring BK. And it is very timely because this is the time of the month in which a lot of my creditors do the auto-pay. I'd prefer to have the extra $2500 this month if it will be OK for me to stop paying now.

PLEASE RESPOND BY SUNDAY! THE FIRST PAYMENTS WILL START ON MONDAY!

On a side note, what should I do when the creditors start calling or messaging me? Should I not answer the phone? If I should answer the phone, what should I say? Should I call them and say that I am not going to be making any payments?

I think that rather soon, after I move back to Louisiana (to a $200/wk week to week place until I can find the home to buy), I will be officially going to a credit counselor, as the first step.

[CityFarmer]

We stopped paying as soon as we decided we were going to file for bankruptcy. It was almost a year before we actually filed. It was around 6-8 months before any creditor took any legal action (received two summons). You'll get plenty of calls, though.

You need to stop using credit right away, if you haven't stopped already. Have you made any large purchases or taken cash advances from any cards? If so, you may want to continue making payments on those cards for a few months. Continue to pay on any secured debts if you want to keep the collateral, of course.

[Penny Less]

If you're doing autopay you need to canel the autopays and then change banks. I had some supremely bad experiences where a creditor I asked to cancel autopay didn't. Warning: When you zero out your balance to close your bank account you'll also need to block the autopays from the bank end so you don't overdraft if things get nasty. Once you are late some will just keep hitting you.

As far as the other questions - just read what's on the forums and in the FAQ's. You don't want to irritate people here by asking too many questions that have already been answered.

I personally wouldn't tell them you're not paying - you don't want to accelerate things if any of them take you seriously. Just don't take the calls.

[Penny Less]

One more tip - might help someone here - one creditor wouldn't cancel my autopay without providing a new bank account once I was in collections. I told them I had moved and already closed the account but would call back with my new account in a few hours. They bought it! I then called back and got a different person and discreetly inquired as to my payment arrangements..it worked. Remember: block them from the bank end too and never ever give your new checking account number out to anyone.

[liz417]

I stopped paying a year before I file for BK. I was never sued. Expect lots of creditor calls though make sure to answer the phone ever once in a while to let them know you are still alive and your "situation" hasn't changed (I told my creditors that I was filing BK).

[swampwiz]

Well, right before I decided I was going to do this, I made a payment of $2K to one credit card, just so that I would have room to do be able to spend money, like on rent, storage, gas, etc. Would this be a problem?

[swampwiz]

I stopped paying a year before I file for BK. I was never sued. Expect lots of creditor calls though make sure to answer the phone ever once in a while to let them know you are still alive and your "situation" hasn't changed (I told my creditors that I was filing BK).

So Liz, when the first creditor calls me up after missing a payment, should I say that I've decided to declare bankruptcy?

[ForumReader]

Well, right before I decided I was going to do this, I made a payment of $2K to one credit card, just so that I would have room to do be able to spend money, like on rent, storage, gas, etc. Would this be a problem?

Probably not depending on when you file, but be careful of doing payments to one credit card over others as that would be viewed as preferential payment. One of the questions an attorney may ask you is this, if you have made any large payments of $600 or more to a creditor in the past 90 days at the time you are ready to file for BK.

[CityFarmer]

Well, right before I decided I was going to do this, I made a payment of $2K to one credit card, just so that I would have room to do be able to spend money, like on rent, storage, gas, etc. Would this be a problem?

If you are planning on filing bankruptcy, you should not be using your credit cards for anything. Since you are planning on filing bankruptcy, it means that you are not planning on paying back the debts, and any additional debt you take on would be done with the intention of not paying it back, which could be considered fraudulent use.

My advice is to figure out a reasonable budget without the credit cards at all. Don't use the cards to pay for anything, and don't try to pay the credit cards. Start living now like you'll be living after the discharge. No debts, but no credit, either.

[swampwiz]

Probably not depending on when you file, but be careful of doing payments to one credit card over others as that would be viewed as preferential payment. One of the questions an attorney may ask you is this, if you have made any large payments of $600 or more to a creditor in the past 90 days at the time you are ready to file for BK.

I just made a payment to one creditor for $2K, but I am going to bleed that out within a month or so after that. Would that count as paying off a creditor? I just wanted to have to use of the credit card. What would be the repercussions? Could I take a cash advance in the same amount to reverse it?

What if I have a checking account at the same institution as the credit cards? Couldn't the bank take it from one to pay the other? If they did do so against my wished, would that be counted as me making a payment? I guess I need to wire everything to a bank in which I have no credit card.

I guess you are saying that I need to wait 3 months. In any case, I was going to wait until about then, or perhaps 6 months from now to file.

[CityFarmer]

I just made a payment to one creditor for $2K, but I am going to bleed that out within a month or so after that. Would that count as paying off a creditor? I just wanted to have to use of the credit card. What would be the repercussions? Could I take a cash advance in the same amount to reverse it?

What if I have a checking account at the same institution as the credit cards? Couldn't the bank take it from one to pay the other? If they did do so against my wished, would that be counted as me making a payment? I guess I need to wire everything to a bank in which I have no credit card.

I guess you are saying that I need to wait 3 months. In any case, I was going to wait until about then, or perhaps 6 months from now to file.

Why do you want to have use of a credit card? Using credit is what got you into this situation. Stop using credit now. Get the scissors out and start cutting. I'm not joking.

Move funds to a bank where you have no credit lines. The bank may be able to take funds from your account to pay off the debt.

I think you need to consult with an attorney. From reading this and other questions you have posted, it seems like your situation may be fairly complicated.

[swampwiz]

Well, it's much easier to use a credit card then walk around with cash. For example, I need to buy some tires. I have to order them through the internet. How else would I pay for them? I need to go stay at a hotel. If I don't use a credit card, I have to put down a hefty deposit.

The bottom line is that I'm not quite broke now. I still have about $75K in property and liquid assets (although I'm going to spend $40K or so to by a house, which I have to do as I have a government grant to do it.) The problem is that I have $125K in debt.

What if I break down on the road and I can't get to a bank? I need to be able to pay somehow. Or should I withdraw $2K from my checking account for such emergencies to have on my person - something that would make me a target of crime?

[nerves]

The best advise I have seen for you so far is to visit with a few different attorneys. We found writing down questions before our meeting was helpful. We hired the only attorney we met with and so far so good but I have seen other posts that were nightmares for others by hiring the first attorney they visited with about their situation. Our attorney has been doing BK for over 30 years and did not charge us extra because we had a business - which was quite a savings. He has been very helpful and has already spent about 4 hours with us answering questions, meeting with our banker, etc and we haven't filed yet. We have paid him the $1125 in full but need to wrap up the business side of things before filing. Usually the intial meeting is free. Good luck to you.

[CityFarmer]

Well, it's much easier to use a credit card then walk around with cash. For example, I need to buy some tires. I have to order them through the internet. How else would I pay for them? I need to go stay at a hotel. If I don't use a credit card, I have to put down a hefty deposit.

Most banks now offer debit cards (aka check cards) for checking accounts that work like a credit card, but take money from your bank account instead of your credit line. Alternatively, you can put money on a prepaid Visa or Mastercard and use that for purchases.

[OhioFiler]

I'm wondering about this. I guess I'd like to know that if I plan to file bankruptcy at some time in the future, how many months before that can I stop paying creditors? Or alternatively, how long after I would stop making payments that the creditors would be able to force me into bankruptcy? This seems to be important because I want to be able to wait until a certain time before actually declaring BK. And it is very timely because this is the time of the month in which a lot of my creditors do the auto-pay. I'd prefer to have the extra $2500 this month if it will be OK for me to stop paying now.

PLEASE RESPOND BY SUNDAY! THE FIRST PAYMENTS WILL START ON MONDAY!

On a side note, what should I do when the creditors start calling or messaging me? Should I not answer the phone? If I should answer the phone, what should I say? Should I call them and say that I am not going to be making any payments?

I think that rather soon, after I move back to Louisiana (to a $200/wk week to week place until I can find the home to buy), I will be officially going to a credit counselor, as the first step.

You've pretty much already made the Monday payments. I doubt you can stop them.

The only advice that is going to help you now is to go visit an attorney. There really is no more forum members can do for you at this time.