Can I pre-pay Mortgage for a few months before filing Ch7?

[zest4living]

Hello -

Newbie here. First off, thanks for all the helpful information everyone takes the time to post.

My mom passed away last year and I was a beneficiary on her savings account. I was issued a cashiers check and I would like to use it to pay my mortgage for the next six months. I am unemployed, husband left and I am raising three young boys on my own. This is the first month that I haven;t been able to pay my credit card bills (most of them were charges to my credit cards for my husband's general contracting business which is also bankrupt at this point).

Can I use the money to pay up my mortgage for the next six months at one time, even if I am not making credit card payments, before filing for Ch7? There is curently no equity in the house but my vehicle will eat up my available exemption amount.

I live in California and am desperately looking for work. I just need to be able to know that my mortgage is covered so that the boys and I don't end up out on the streets while I try to get our life back on track.

Will this be a problem with the bk courts and the trustee?

Thanks so much for any helpful advice you could provide

[dneil]

when did you stop paying your credit cards?

[zest4living]

Forgot to add...BofA holds my mortgage and a large amount of my credit card debt.

Could they take the money from the pre-payments to pay the credit cards?

[zest4living]

Hi Dneil - No payments since the 22nd of December

[dneil]

No, bank of america can not take money you pay on your mortgage and put it toward the credit cards. I am not sure if this would be considered a preferencial payment, so that would have to be answered by someone more knowledgeable. What I would say is this:

It has only been since December since you stopped paying. You have time before they start threatening to sue. Maybe even 6 months. I went almost 2 years before my first judgment where I had to get the ball rolling on my chapter 7. That might be in your favor.... that fact that it hasn't been that long. I am going to not give you any advice and see if someone else more knowledgeable about this will answer.... I want to be sure you get the correct info.

My gut feeling is that you might have quite a bit of time before you have to file which may be in your favor... again, lets see if someone else more knowledgeable comes along... Hold tight....

[dneil]

I am sorry for your loss.... I lost my dad a little over a year ago and know how difficult it is losing a parent.

[dneil]

I have to ask, what kind of car do you have that would eat up all your exemptions???

[BrokeinMD]

I would speak with a CA attorney, but for my situation, I received a bonus in March 2010 that sent me above the means test for a Chapter 7. My attorney made me wait for two months to file in October 2010 until that dropped off from the 6 months back of paystubs you submit with your initial filing.

[shark66]

AFAIK, you can pre-pay your mortgage without any issues. "Preferential" payments would only be to an unsecured creditor, such as CC company...

The best of luck to you.