Preferential payment and 90 day time period questions

[needanswers]

We've never been late yet...but payments are coming due this month so they will all be late in a matter of days. We made some charges on an AMEX account last month that has to be paid in full this month. It's about $650 that we owe, due in full now. Would paying that now as budgeted be considered a preferential payment?

I just read about the no charges in 90 days before filing. On other cards, we did make some charges on essentials and payments and I'm worried that we are going to have to wait to file. Our plan was to file late May, early June.

[BKDefender]

Yes. But remember a preferential payment doesn't hurt you, it hurts the creditor because they'll be required to pay that payment to the trustee.
If you're about to file bankruptcy, I can think of only one reason why you would continue to make payments on credit cards - you have great credit and your credit will recover much quicker to a higher number if you file bankruptcy while your credit is still great.

Don't think for one second that AMEX is going to let you keep that credit card after you file though, even if you owe them nothing, almost all credit card companies close accounts when they find out you have filed bankruptcy. The creditors subscribe to a daily EDI download from the Bankruptcy Notification Center (BNC) and if they receive, in that daily download, your social security # and name, and you have an account with them, you should expect it to be cancelled.
Heck - I had a client that was notified TWO DAYS after I filed her case that her Nordstrom card, which had a $0.00 balance and was thus not listed in schedule F or the mailing matrix, was canceled. That was her favorite store and she wasn't too happy, but she remembered that I warned her about it and had already expected it.

--William

[keepmine]

The preference issue is between the creditor and the trustee.
If the trustee wishes, they can clawback the payment from AMEX. It's has no affect on you.
Just be sure you list AMEX as a creditor.
Frankly, nobody is worried about $650. Paying AMEX is money down a rathole. Just stop paying all debt you wish to discharge and use that money for living expenses. If you still can't make ends meet, you have a problem bk can't fix.

[needanswers]

Thank you for your replies. These are all charges that we just incurred last month (car insurance, Netflix, commuter parking) and we have budgeted for this bill coming up. It would have been nice to keep AMEX happy and been able to use this for renting cars and stuff in the future but I realize this is not even remotely possible. Yes, our credit scores are pretty high right now. We've never been late on any payment but all of our reserve money is gone, overtime is gone and there is no money to pay anything anymore.

With no CCs, we can survive financially without savings, overtime, etc.

[Mensa1]

Don't think for one second that AMEX is going to let you keep that credit card after you file though, even if you owe them nothing, almost all credit card companies close accounts when they find out you have filed bankruptcy. The creditors subscribe to a daily EDI download from the Bankruptcy Notification Center (BNC) and if they receive, in that daily download, your social security # and name, and you have an account with them, you should expect it to be cancelled.
Heck - I had a client that was notified TWO DAYS after I filed her case that her Nordstrom card, which had a $0.00 balance and was thus not listed in schedule F or the mailing matrix, was canceled. That was her favorite store and she wasn't too happy, but she remembered that I warned her about it and had already expected it.

--William

Correctamundo on AMEX. I had an AMEX card with a 33K credit limit and 0 bal at time of filing, and to date they are the only cc that I have heard from (cancelled). A whole drawer full of plastic that has yet to be heard from, (well over 100K of credit limit in total) all with 0 balances, so we will see. Expecting everyone of them to cancel before it is over with. Just had the 341 last week, so less than 60 days into this thing.

[gmk]

I could be wrong on this but I read the OP to say that the charges on the AMEX (and other) card(s) were made in the month prior to her billing statement and she keeps the card(s) current. Rather than a preferential payment wouldn't this be more of paying for goods and services rendered and thus not preferential?

[BKDefender]

gmk - if AMEX pushes back against the trustee they could probably have it deemed that way, but for $650 they're not going to do it.

--William

[catleg]

William is correct, all your cards will be closed.
Amex is a company that will blacklist you from future "cardmembership" if they lose money on you in a BK.
Not sure how important that is for you.