couple of questions about not paying on the cc's

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Ok, so I was told by a friend that her BK attorney told her to pay $10 month on the cards as that would keep her out of collections. Then I read here that the $10/month thing isn't so....they'll send ya off to collections anyway. Is her atty a quack? Sending $10 does not stop them from sending you out to collections? I was hoping it would at least stall or keep me in their in house collections. I figured having everything "in house" would make for a less messy BK process? BTW...until this month, everything we owe was current.

Also, now that we're not paying the hundreds in minimum payments on the cards, we're going to have lots of extra cash each month. I know the answer is always "save it for your atty", but we already have the cash for that. We have a little over $4000 in our savings right now. What does the trustee have to say about the extra cash I should now have? Do I need to start spending it on things like stocking the freezer and making sure my kids have clothes that fit for the summer and such?

And if we decide we like this atty the best, should I plan to pay him his entire fee up front or just a retainer? I'm concerned about that cash in the savings.....I want it to go for the atty and not a trustee.

TIA!

thanks!

[StartingOver08]

$10/mth will not keep the accounts out of collections.

If you are filing a Ch 7 - the fee goes to the attorney first before he will file your petition. The fee must be paid up front. The reason many people have to make payments to the attorney is because they have not saved enough to make the payment in full. If you are filing a Ch 13 some attorney's will roll part of their fees into the plan payment.

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Thanks. We're planning to file 7. We can't afford a 13 due to the loss of my dh's job. We're now "low income".

So, any extra cash we have from not paying credit cards has to be spent wisely, correct? I can't bank it and expect to keep it?

[StartingOver08]

You want to make sure that the things you want to keep (including cash) are within your states exemptions. Check your exemptions here: http://www.legalconsumer.com/bankrup...lName=Michigan

Any funds over the allowed amount are subject to going to the Trustee - that is why there are so many posts about how to spend funds over the allowed exemption amounts.

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Thank you!!

[JohnSmithson]

If filing chapter 7 be sure to read up on the 2005 bankruptcy law changes.