CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

Should You Continue Paying Your Debts after You Decide to File for Bankruptcy?

What To Do After Bankruptcy Tampa, St Petersburg, And Pasco Florida.One of the most common questions bankruptcy lawyers get from clients is whether or not they should keep making payments toward their debts.

Unfortunately, there is a great deal of misleading information out there about how to deal with overwhelming debt. Some debt management companies encourage clients to stop making payments when they consolidate debts, but this can actually lead to bigger problems in the future.

If you’re using debt management to avoid bankruptcy, not paying debts can actually lead you to bankruptcy within a few months anyway.

But what if your mind is already made up to file for bankruptcy? If a debt is going to be discharged in a few weeks or months, should you bother paying it?

The answer is maybe, but it depends on the type of debt and chapter bankruptcy you choose.

Chapter 7 and Chapter 13 Bankruptcy

First, let’s consider the two different chapters of bankruptcy.

Chapter 7 bankruptcy discharges all or most unsecured debts. It’s usually the best option for individuals facing financial challenges who are earning at or below the median income, or for those who have very little disposable income each month.

People who have few or no assets often choose this type of bankruptcy because they have nothing to lose. Any assets they do happen to own are liquidated unless exempted and that money is used to pay the creditors.

Any debts not paid off in the liquidation of assets are discharged and the debtor bears no legal responsibility for the debt.

Chapter 13, on the other hand, is a reorganization of debt. It provides the debtor with more time (usually three to five years) to pay their debts. At the end of the timeframe, any unsecured debt not paid in discharged.

This type of bankruptcy is a better option for those who have a decent wage and assets they want to protect. Chapter 13 filers must pay their secured debts on assets they intend to keep, such as their home or vehicle.

To learn more about secured debts and Chapter 13 bankruptcy, check out this information.

To Pay or Not to Pay?

Many attorneys recommend stopping payment on your debts if you are making any, when you decide to file. Bankruptcy creates expenses and the money you’ve been using to pay the debts can be put toward your filing fees. As a matter of fact, this is one of the primary reasons attorneys tell people to stop making payments – they lack the money to file for bankruptcy, but they can put the payments toward their fees.

And since the debts are likely to be discharged when you file for Chapter 7 bankruptcy, you’re paying money toward a debt that’s going to be eliminated anyway. You’re essentially throwing money away by paying unsecured debts once you’ve made the decision to file.

Every situation is different, so whether or not and when you stop paying your debts can vary. Some people just aren’t comfortable not making payments when they have the money to do so – even if they’ve been struggling and have fallen behind over the months and years on a particular debt.

Your best bet is to speak with an experienced bankruptcy attorney who can review your situation and give you advice specific to your case.

For more information or to schedule a consultation to discuss your bankruptcy strategy, contact the Law Office of Robert M. Geller at 813.254.5696 to schedule a consultation.

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

Should Seniors File Bankruptcy? Here’s 3 Things You Need to Know

Should seniors file for bankruptcy? Maybe. It all depends on their specific financial circumstances. Bankruptcy can be a great solution...
Read More

What Happens If My Spouse Dies During Bankruptcy?

Seniors declaring bankruptcy have many concerns. One of the most pressing is how their health or their spouse’s health might...
Read More

Can I File for Bankruptcy Without a Job?

Bankruptcy is often considered a tool used by people without money, without income, and without any financial hope. The truth...
Read More

Should I Use Retirement Savings to Avoid Bankruptcy? A Tampa Bankruptcy Lawyer Can Help You Protect Your Retirement Nest Egg

Withdrawing money from your retirement savings is rarely advised by financial experts, even if you are facing bankruptcy. Working with...
Read More

Can You File for Bankruptcy and Keep Your Home

Foreclosure is something that occurs after a homeowner has missed multiple mortgage payments. Working with a Florida bankruptcy attorney helps...
Read More

Is There Such a Thing as Mortgage Bankruptcy?

Your home is one of your primary concerns when filing for bankruptcy. Can you claim bankruptcy and keep your home?...
Read More

What Do You Need to Know about a Home Auction in Bankruptcy?

Home auctions are a common topic that arises when someone is faced with the prospect of bankruptcy. Bankruptcy protection for...
Read More

Can a Florida Bankruptcy Attorney Help Me Avoid Eviction

Losing one’s home is one of the most common concerns you can have when filing for bankruptcy. A Florida bankruptcy...
Read More

Covid-19 Tax Tips

The COVID-19 pandemic has affected a variety of things including taxes. These COVID tax tips can help you prepare and...
Read More

How Can a Bankruptcy Attorney in Tampa Florida Help Me If I Fall Behind on My Mortgage After Filing for Bankruptcy?

Many people find that filing for bankruptcy provides all of the financial relief they need to get back on track....
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

NACBA Logo avvo1 avvo2 avvo3 LEA BBB Logo

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions