When should you stop paying credit card bills

[PRN]

When to stop paying cc bills?

The same week I spoke with an attorney to file Ch 7 I stopped paying CC. They were all current, and now my banker says I have a 652 on my Credit rating. But I promise my self I will never do that again. I love using cash or my debit card. Sometimes it is inconvient, if I have an emergency and need a large amount of cash for auto repairs or whatever, but thats life, I'm just learning to save every dime I can for that emergency when it does come.
Good Luck to you.

[Rona123]

Cake,

I agree that I'd love nothing more than to not ever be tied to or defined by my credit score again, but as Lostone suggests, like or it not, much of what we are able to do in life post-BK depends on that stupid FICO number. I too would like to be able to buy a home again someday, and know I'll need a car sooner or later.

I think that the only instance in which a high credit score is a BAD thing is if somone went through BK and didn't learn anything from it. In that case, a high credit score could enable them to end up right back in the same spot. For the rest of us, it could help us AVOID being in this position again, if only because it will help guarantee us lower interest rates, better terms, etc...

Having said that, I'd love to see a "Fight Club" scenario where all the records are destroyed and everyone becomes equal again!

"It's only after you lose everything that you are free to do anything" - Tyler Durdin

Ron

[DisneyGirl]

Your credit score is important. It can keep you from getting a job you desire, an apartment or other rental, having to come up with extra deposits. It's more than just buying another car or home later. Take it from someone who's husband is losing his job after 9 years with the company and at the same time our apartment complex is going condo and kicking everyone out! Credit scores are important.

[aa06a47]

Yes, I agree credit scores are important, but if your filing bk, you are going to take a big hit. There are ways to improve the scores after you file and get your discharge.

[SinkingFast]

We stopped paying CC's when we ran outa money. We had a few things we knew we had to pay and we had a bit of cash left. So we paid those things instead of CC's. Auto insurance premiums and Income Taxes seemed a little more important than CC minimums.

We've missed 3 payments now. And we are getting reported. And our house is on the brink of Foreclosure. But we couldn't do anything else.

We are hoping this LAST CONSULT will be THE ONE. The attny we use to file our BK. If so, we're planning on filing sometime next month.

Pay your CC's as long as you can to help keep your credit score up and your relationship with the Creditors. Every one I've spoken with all asks, "What happened??!! You were current. Always paid your bills until, or thru" So the Creditors know there was some sort of change in our situation. Many didn't even report us late, even after 2 missed payments. Several didn't even jump our interest rates until we got the 3rd bill.

But, don't waste money with CC payments either. Every unsecured Creditor you pay an aggregate (total) of $600 or more to in the 90 days before filing, the Trustee is gonna go back to those Creditors to get that money. It's nothing for you to worry about, but it's money that will line the Trustee's pocket for the Trustee to "redistribute" to the Creditors.

So, if you need to pay your auto insurance, or see the Dentist or the eye doctor, or your house needs repairs, etc etc etc, spend the money on yourself. On necessities.

It's true, the higher your FICO going into BK the higher your FICO immediately after BK.

It's all a balancing act, a lot of this planning stuff. What to do when. It really depends on your own personal situation and what you need to accomplish.

[djk]

pre-planning brankruptcy 6 to 7 months down the road with cash advances involved sounds alot like planned fraud to me. just my opinion, I could be wrong.

[inseriousdebt]

$600 or more to creditors 90 days before filing?

Does this apply if I pay ONE creditor $600 more than any other creditor, or does this just mean that if I took my tax refund and paid each creditor 250.00 for three months and then decidied to file.....that this could be taken back? I am assuming since it is a 'preference', this means the first?

[KevinR]

After you get your discharge you can dispute all the negative items on your credit report as IIB (included in bankruptcy). If it's a debt you got discharged through BK, you can get it wiped off that way.

I think this only really works with late pay stuff. Judgements, foreclosures, and things of that nature are different. I believe you can still get those taken off, but it's more complicated. Still, for a few years at least the BK itself will keep you from doing much of anything credit wise. So use that time getting all the other stuff on your credit report cleaned off.

[FoolAndHisMoney]

I don't understand this belief that a high credit score is something we as bankruptcy filers desire. Isn't credit what got us here in the first place? Or, is a high credit score like a report card? Do we attach our self worth to this number? I just don't get the fascination.

My goal in bankruptcy is to come out the other side with as many assets in tact as possible, credit score be damned.

You want a good score for the sake of getting a good rate on a car or house which you will always need. Other then that no credit cards are good credit cards.

[SinkingFast]

Does this apply if I pay ONE creditor $600 more than any other creditor, or does this just mean that if I took my tax refund and paid each creditor 250.00 for three months and then decidied to file.....that this could be taken back? I am assuming since it is a 'preference', this means the first?

Say you pay BoA $250 each month, and MBNA $300 each month, and Chase $275 each month, and Providian $400 each month, and Citi $350 each month. Let's just say those are your minimums and you pay each one right up the the day you file. All Creditors are unsecureds. This only applies to unsecureds.

BoA would have received $750 from you in the 90 days before you filed.
MBNA, $900 ($300 x 3)
Chase, $825
Providian, $1200
Citi, $1050

The Trustee would go back to each and every one of those Creditors for the total of the payments made to each Creditor within the last 90 days before you filed.

It's not a problem for you, the filer. Nothing you really need to worry about. It's between the Trustee and the Creditors.

BK will not take Judgements off your credit report. BK will not take Foreclosure off your credit report. Both are public record filed at the Court House.

If you have the debt of a Judgement discharged in your BK, you will have to have the Judgement released at the Courthouse in order for it to no longer show on your Credit Report. That may require the assistance of an attny to get the Judgement released at the Court House.

Foreclosure will stay regardless. If you can, get the house into BK and let it go that way, then only the BK shows on your Credit Report. If you are Foreclosed first and then file BK, your credit report will show both and you'll have a double whammy to deal with.

[FoolAndHisMoney]

pre-planning brankruptcy 6 to 7 months down the road with cash advances involved sounds alot like planned fraud to me. just my opinion, I could be wrong.

Pre-bankruptcy planning is ok if you legally and reasonably exempt non-exempt assets. As soon as you decide you are really going to file then taking cash advances would be fraud. Another thing that some nervous people do is if they think they are going to file they take a final advance and use it to buy time making minimum payments for several months. This is no good if you don't have the income and know you're broke and can't possibly pay back this new debt. Even if the advance was made six or more months before filing, if a creditor disputes this a judge may rule in their favor because the debtor mis-represented themself by creating an illusion that they were solvent when they really weren't. You're always better off stop using & stop paying credit cards rather then "buying time" with a cash advance.

[Bronte]

"It's only after you lose everything that you are free to do anything" - Tyler Durdin

Ron,
I remember quoting that line above from "Fight Club" after I filed for Bankruptcy. In my mind I felt I lost everthing and now was free.

[djk]

Pre-bankruptcy planning is ok if you legally and reasonably exempt non-exempt assets. As soon as you decide you are really going to file then taking cash advances would be fraud. Another thing that some nervous people do is if they think they are going to file they take a final advance and use it to buy time making minimum payments for several months. This is no good if you don't have the income and know you're broke and can't possibly pay back this new debt. Even if the advance was made six or more months before filing, if a creditor disputes this a judge may rule in their favor because the debtor mis-represented themself by creating an illusion that they were solvent when they really weren't. You're always better off stop using & stop paying credit cards rather then "buying time" with a cash advance.

i agree 100%. the individual that started this thread expressed concern about having 6 to 7 months of time lapse after taking a cash advance recently, to me that's planning fraud because they express no intention of ever repaying the money at about the same time it is taken.

[Rona123]

Bronte,

I know exactly what you mean. I'm still 26 days away from my 60 days, but I know that's what I'll be feeling when I see that "discharged / closed" statement in PACER!

Ron

[aa06a47]

i agree 100%. the individual that started this thread expressed concern about having 6 to 7 months of time lapse after taking a cash advance recently, to me that's planning fraud because they express no intention of ever repaying the money at about the same time it is taken.

If you realize you are going to have to file bankruptcy, there is nothing wrong with planning to get the most relief from your bankrputcy. I don't thing ga took cash advances with the intention of filing bk. However, since he has taken them, he might as well wait at least the amount of time where they are dischargable.

If you do know your going to file bk, and take cash advances out, then yes you have committed fraud.

I don't think anybody on this thread should assume someone is guilty of fraud unless you know all the facts.