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Should I pay off small credit cards?

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    #1

    Should I pay off small credit cards?

    I was told my a former lawyer and family member that it would be beneficial for me to pay off 1 or 2 small credit cards (which I do have) before I filed Ch 7. He told me it would be highly beneficial to my rebuilding credit immediately after filing.

    I have 2 small cards, both under 1,500, my other 3 Cards are all 10k-50k per card (totaling about 110k).

    Also, my current lawyer (not this family member) told me I couldn't pay ANY creditor back more than $600 within 90 days of filing.

    Should I postpone my BK filing 'til 91 days from the day I pay off the credit cards? Or should I file this month (I'm ready to file).

    Any advice would sure help!

    I'm in Washington, but I just moved from California 8 months ago so I'm under California's BK Bankruptcy/Exemption Law.

    Thanks for your time!
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    #2
    I don't mean to disagree with a lawyer and family member, but, your credit rating will be toast anyway. It does not matter what cards are out there as nobody will look at your past only that you filed bk. The best way to heal your credit is after your discharge, get a few cards and pay off each month. Consider you are starting at zero.

    Remember this is my opinion and what I have read here as consensus. 'Hub
    If I knew it all, would I be here?? Hang in there = Retained attorney 8-06, Filed 12-28-07, Discharge 8-13-08, Finally CLOSED 11-3-09, 3-31-10 AP Dismissed, Informed by incompetent lawyer of CLOSED status, October 14, 2010.

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      #3
      I don't see how paying those cards off will help much at all. Even if you pay them off, the cards will most likely still be closed as part of the bankruptcy. My lawyer told me that any payments I make toward a debt that will be discharged is just a waste of money.

      Now, if you want to save the relationship you have with the issuer of the card, it may make sense to pay it off. I had to switch credit unions because I BK'd on a card I had with my previous credit union, and they terminate memberships if a member causes them a loss. I didn't really care, a bank is a bank.

      Also, one important note...do take the advice of your current lawyer. Any payment over $600 to a single creditor is bad news. The trustee can go and take the money back from creditor. In this case, both you and the creditor would be out the money, which is a total waste.

      Oh, one more thing... remember that just because you filed doesn't mean you can't still pay the debt. You can still voluntarily pay after the discharge.

      Comment

        #4
        No. I don't think that it will help you at all.
        All information contained in this post is for informational and amusement purposes only.
        Bankruptcy is a process, not an event.......

        Comment

          #5
          If you have money to waste please send it to me.
          even if you pay off the CC's after you file they will show IIB on your CR. SO there isn't any benefit to paying them off.
          Chapter 7 07/30/2008
          341 09/17/2008
          Discharge 11/21/2008

          Comment

            #6
            Unless you have a balance you do not have to list them! BUT, they might not survive the Bk, I know I had two GEMoney bankcards with zero balances they were closed once I filed! Very few cards do survive your bk, and if they do they are an exception!
            November 2, 2009: Filed Chapter 7, December 10, 2009: 341 Done! January 11, 2010 Last Day for Objections! February 9, 2010 Discharged!!! February 12, 2010 Case Closed, MyFico on 11/09: 550, Now: 715!

            Comment

              #7
              Originally posted by SPalin View Post
              Unless you have a balance you do not have to list them! BUT, they might not survive the Bk, I know I had two GEMoney bankcards with zero balances they were closed once I filed! Very few cards do survive your bk, and if they do they are an exception!
              NO cards should survive the BK. And if one did you really need to call them and close that account
              Chapter 7 07/30/2008
              341 09/17/2008
              Discharge 11/21/2008

              Comment

                #8
                It's really a complete waste of money.
                You can't keep the credit line open, and you really should get out of the credit habit.
                If you have money to spend, put it towards some exempt purpose, or paying taxes, student loans, or secured debt.
                Last edited by catleg; 01-22-2010, 04:24 PM.
                filed chapter 13..confirmed...converted to chapter 7...DISCHARGED!

                Comment

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