Secured debt question

[Skipper]

Is there any concern if I pay down a secured debt (car loan), if I am more than 90 days out from potentially filing? The equity that I would have, would still be exempt, so that is not a concern.

I have read some things concerning "preferential" type of payments, but I believe that applies to unsecured debt...

Either way, I am many months from having to make the final decision, but I do not want to do something improper, only to have it come back and bite.

I would appreciate any thoughts you all may have!

Skipper

[cc8225]

I have the same question Skipper, I am considering paying off my car 3900 when I get my tax return because i have a signature loan with the same credit union for 19,000. Any thoughts?

[AngelinaCatHub]

For both above questions. In your paperwork there is a place for listing your intent. (don't ask, I'm not a paperwork person). You can pay through or what is safer (but not recommended) is to reaffirm the debt.

Way out from 90 days is not unreasonable Will either be represented? Once you are, confirm what I have said. I just kept paying my car, but within and after the filing I reaffirmed. There were no questions before or after the reaffirmation. Your intent is to keep it, pay for it. 'Hub

[AngelinaCatHub]

Preferences
Note that payments to a fully secured creditor aren't preferences because the creditor didn't get more than he would have in bankruptcy, where the creditor would get the value of the collateral.

A non obvious preference may occur when the creditor converts an unsecured debt to a secured debt by recording a financing statement long after the transaction with which it was associated; by obtaining a writ of attachment; or by recording a judgment lien.

Creditors are best served by the prompt perfection of such liens to lessen the possibility that the advantage obtained by getting the lien is lost in a preference recovery action in a subsequent bankruptcy.

http://www.moranlaw.net/preferences.htm