When to quit paying CC minimums?

[IOIOIO]

I currently have no derogatory items on my credit report, as I continue to pay all my CC's minimum payments on time. Aside from dunning letters and phone calls, what are the cons to ceasing my minimum monthly payments now in order to buy extra months before I have to file Ch7? Can the CC companies cause my eventual chapter 7 filing any more difficulty, or are they pretty much reduced to nothing but screaming and yelling at me for the months I'm delinquent before I actually file? I only have unsecured consumer debt (a boat load of CC's) and no real property, so I'm not subject to any repos or foreclosures or evictions as long as I pay my rent each month. I guess they could garnish my wages for those months, but my meager wages from underemployment are the problem. Are there any other caveats I need to watch out for if they go ahead and obtain judgments against me before I file, as opposed to filing while I have a clean credit report and no delinquencies? There's no evil plan here, just the plain fact that I believe I'd rather keep my head buried in the sand while they hound me just to put off facing the inevitable that much longer. I could also win the lottery in that time. My mountain of debt is spread over so many CC's that I think quitting the minimum payments on all of them would push my filing date ahead by 6-12 months, unless maybe they were able to seize my bank account and prevent me from paying rent and buying food.

On the other hand, would it somehow behoove me to make the payments and collect the hard copies of the CC statements to be able to show a trustee the months I've been robbing Peter to pay Paul by draining what's left of my credit to make minimum payments? I have no statements archived because I didn't know a trustee might ask for them, but I've learned differently since reading through this site. I've also learned that it will be difficult to obtain years of back statements from my many CC's when the trustee asks where all the money went.

[SinkingFast]

Just as a fluke, I started saving CC's statements about a year ago.

Before that, when I paid each month's bill, I'd toss the rest of the statement in the trash.

So if the Trustee wants more than a year's worth of bills, we're SOL without our attny compelling the CC companies to cough up the evidence. Kah Ching! for our attny.

Just start saving your statements now. It may take 2-3 months, possibly more, for you to find an attny and gather all your other documentation. Maybe your lease will come up for renewal and you'll need to wait to file after that happens. So you'll probably have some time.

When you stop paying payments totally depends on your own situation.

Obviously, if you file BK and you're current on your payments, your Credit Rating coming out of BK will be higher.

Most people simply cannot afford to do that. Many need the CC payments money to pay their attny's fee. Many people quit paying because they couldn't afford to keep it all up and now seek BK to prevent legal action by Creditors.

You need to decide what will work for you.

But bear in mind, there's a 90 day/$600 aggregate rule. Each Unsecured Creditor that you pay in excess of $600 to in the last 90 days prior to filing, the Trustee could potentially go back after that money to distribute to the Creditors.

Sounds simple, but it also involves a Court hearing and you testifying about the payments. One of our CC payments was right at $500/mo. The Trustee woulda definitely gone after that Creditor. So keep that in mind as you decide when to quit paying who each month.

[monlyba]

Obviously, if you file BK and you're current on your payments, your Credit Rating coming out of BK will be higher.

did you mean to say lower? maybe i am confused. i was figuring if a person was current, their report would look not too shabby pre-bk, maybe just a bad debt ratio or whatever, but decent because bills have been paid on time. but then the bk would cause it to go down quite a bit until credit is built back up. i'm no expert, just hoping i understand this correctly.

[Bobby'sGirl]

I think she is referring to the fact that after the BK filing dip, it will rebound more quickly because of the positive history pre-BK.

[gettingnewstart]

In my situation, I stopped paying in April/May and filed in July. My score plunged 200-240 points. I think because each reported late payment took off x amount of points and then the BK took off the majority of the points. So, if you keep current on payments, you only get knocked by BK. If you miss payments, those and the BK count against you.

[IOIOIO]

So the only caveat regarding a BK with lots of outstanding judgments vs. one with no other derogatory items is the difference in my FICO score when I come out the other side? Are there any other weird things that could result from derogatory items aside from the BK or creditors obtaining judgments against me before the BK, or is the resulting FICO score the bottom line? After reading through lots of threads, there's no consensus as to how different it would be to have a FICO in the 400's vs. the 600's right after BK. Of course, the higher score is preferable to preserve your options, but how much difference will there be 6 months after you begin rebuilding your creditworthiness in the freshly started life you plan to have free of CC's anyways?

[SinkingFast]

I think she is referring to the fact that after the BK filing dip, it will rebound more quickly because of the positive history pre-BK.

Yep, BG. That's what I meant.

If you stay current on your CC payments up to the time you file, you'll have a higher Credit Score coming out of BK than if you'd missed 5+ months payments prior to filing.

Some people have posted here that they paid right up to filing. They said they were mid 700's when they filed and they dropped to right around or slightly under 700.

People who've missed several payments, with scores that are upper 500 to lower 600 when they file. Some of those people have reported dropping into the 400's after filing BK.

But you gotta do what you gotta do. If you need money to pay your attny, and the only place to get the $$$ is by missing CC payments, then that's what you gotta do.

[IOIOIO]

It's such a tough call. Ending up with a score of 700 would start me off in almost a totally normal state, which is clearly desirable. But I can't really determine the consequences I'd experience if I came out with a much lower score or how long these consequences would last. I'm obviously not planning to purchase a house or vehicle first thing on the other side of BK, and I'm not planning to go apartment hunting either. But since I'd have no arrears with my long time current landlord--I'd be paying my rent each month come hell or high water--I would think that good reference would mean something to any prospective new landlord despite an abysmally low FICO score.

[anonymuse]

Just remember, BK won't help if you continue the same spending habits afterwards. You're underemployed and need to adjust your lifestyle to live without the need for credit cards.

[IOIOIO]

Just remember, BK won't help if you continue the same spending habits afterwards. You're underemployed and need to adjust your lifestyle to live without the need for credit cards.

Amen to that. Except for catastrophes, the only practical consequence I can think of to not being able to get any kind of credit card would be the inability to rent a car the couple times a year I find it necessary. Other than that, I'd go completely CC-free. I've looked into those carshare arrangements, but they cost more than your basic $30/day rental unless you need to use the car a lot more often than I need to.

[FraggleRock]

We were current on every card until we filed. It was odd not paying the bill, then phone calls. UGH! I HATE CHASE! They would call and call and call. Waking up my kids each and every time....ughhh.....

We are rebounding quickly I think becuase we were current before. We don't look like a major credit risk, just a little higher than average risk.

[SinkingFast]

Amen to that. Except for catastrophes, the only practical consequence I can think of to not being able to get any kind of credit card would be the inability to rent a car the couple times a year I find it necessary. Other than that, I'd go completely CC-free. I've looked into those carshare arrangements, but they cost more than your basic $30/day rental unless you need to use the car a lot more often than I need to.

I actually had to rent a car last month. Daughter had a wreck a while back. Other driver's fault. Their insurance would reimburse us for the rental car, but we had to pay up front. No CC's here either, so I wasn't gonna go there. But we had a death in the family at the same time and I needed to run outa state for the funeral.

Enterprise took my Debit Card. They pinged our acct for $200 up front. When I returned the car, the total came to $169. They asked did I want cash back, or have my acct reimbursed. I went for reimbursed. Funds were there next day. We got reimbursed later, for the days the bodyshop had our car by the other driver's insurance.

But Enterprise will accept Debit Cards to rent a car.

Enterprise and Avis, I think it is, both have a Cash rental policy. You have to apply in advance. You get issued a Cash Rental Card from them that allows you to pay in cash at any branch location. The Cash card is only good for so long. One was 6 months I remember. Then you have to reapply.

[$$only4ever]

All of my bills were current when we had our first appointment with the attorney. At that time, the attorney said do not pay on the CC's anymore, but keep paying everything else. We filed 3 weeks later so nothing was reported past due.

[gacreditguy]

I paid my payments up to the day that my case was filed. I filed CH7 - No Assetts on 1/29/6 and was discharged on 6/30/6. No issues whatsoever. I have reviewed all of my credit reports and there are NO late pays listed anywhere. I do have a few minor things to fix ut all looks good. I went into BK with scores around 630 and right now my scores are averaging 620's. Not too bad. Once I get the few booboo's corrected I expect to see scores in the high 6oo's

[tradewiz50]

Credit Cards are the Devil...