CALL FOR A FREE
INITIAL CONSULTATION
813.254.5696

BRIDGING YOU TO A BRIGHTER FUTURE

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

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.

Tampa Bankruptcy Law Blog

Can I Move Out of State after Filing for Bankruptcy?

Can I Move Out of State after Filing for Bankruptcy?

Most people know there are limitations on traveling and moving if someone is accused of committing a crime, but what...
Read More
What Should I Know about College Loan Debt?

What Should I Know about College Loan Debt?

If you’re thinking about borrowing money to pay for college or your child is thinking about college and you know...
Read More
Should You Continue Paying Your Debts after You Decide to File for Bankruptcy?

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

One of the most common questions bankruptcy lawyers get from clients is whether or not they should keep making payments...
Read More
Debt in Collections? Five Things You Shouldn’t Do

Debt in Collections? Five Things You Shouldn’t Do

Having a debt be turned over to collections is not the end of the world. Even those who are careful...
Read More
How Can I Avoid a Second Bankruptcy?

How Can I Avoid a Second Bankruptcy?

Bankruptcy is viewed as a solution to serious money challenges. It offers a brand new start and helps you get...
Read More
Will Bankruptcy Help Protect My Vehicle from Repossession?

Will Bankruptcy Help Protect My Vehicle from Repossession?

The idea of bankruptcy might be intimidating, but filing can actually help you in a variety of ways. One of...
Read More
What is the “Wild Card Bankruptcy Exemption”?

What is the “Wild Card Bankruptcy Exemption”?

There are a lot of terms that arise when you’re considering bankruptcy. It’s important to understand what each thing means...
Read More
Will Filing for Bankruptcy Help You Remove a Court Ordered Judgment?

Will Filing for Bankruptcy Help You Remove a Court Ordered Judgment?

A court ordered judgment against you related to debt can wreak havoc on your life, but it might be possible...
Read More
Understanding Credit: What Factors Affect Your Score

Understanding Credit: What Factors Affect Your Score

Dealing with financial problems can be one of the most difficult challenges you’ll ever face. Not only is it overwhelming,...
Read More
Health Issues Drove Me to Bankruptcy and I’m Still Getting Medical Bills: Can Bankruptcy Help?

Health Issues Drove Me to Bankruptcy and I’m Still Getting Medical Bills: Can Bankruptcy Help?

Medical issues are one of the most common reasons people file for bankruptcy. In most cases, health emergencies arise unexpectedly...
Read More

Contact Us

Search Website

Archive

Request a FREE Consultation

For The Next 5 Days Get A Free Book About Bankruptcy


 
comodo 10.0Robert Marc Geller
Robert Marc GellerClients’ ChoiceAward 2017 Robert Marc GellerReviewsout of 32 reviews LEA

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

Pay Online     Bankruptcy Courses    

Office Locations

$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
Maps & Directions


Tampa Law Office Map

Satellite 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
Maps & Directions


Map and Directions

At the Tampa Bay law firm, the Law Offices of Robert M. Geller, P.A., we help people with consumer bankruptcy matters in the Tampa Bay-St. Petersburg,  Florida communities such as Clearwater,     St. Petersburg, Tampa, Thonotosassa, Riverview, Lutz, Plant City, Brandon, Carrollwood, Wesley Chapel, St. Petersburg Beach, Lakeland, Mulberry, Dade City, Pinellas Park, Largo, Seminole, Odessa, Oldsmar and Lithia, and counties such as Hillsborough County, Pinellas County, Pasco County, Polk County and Manatee County.