If you have filed for bankruptcy or are considering filing for bankruptcy, you may be wondering if you should continue to pay debts after filing for bankruptcy. For most debts, the short answer in no you should not pay debts after filing for bankruptcy or leading up to filing for bankruptcy as these debts will be discharged in your bankruptcy case. Of course there are exceptions to the general rule.
Most consumers hire a bankruptcy lawyer because they are overwhelmed by their debts due to mistakes they have made in the past, unemployment or unexpected circumstances, such as a medical situation. For many people considering bankruptcy, they are already delinquent by several months on their debts or have already started to receive collection lawsuits or are even having their wages garnished which means they have a judgment against them, sometimes without even knowing it until the garnishment happens. With that said, there are many other consumers who have consistently made their minimum monthly payments up until they have filed for bankruptcy and there is nothing wrong with that either. For many debtors, the concept of not paying on bills and obligations is foreign and doesn’t feel good at all. However if you are a person who needs a fresh start, stopping payment on debts that will be discharged in your bankruptcy case is the best way to go while planning on filing either a chapter 7 bankruptcy or chapter 13 bankruptcy. These additional funds could be used for your bankruptcy fees, living expenses or to build up a small savings prior to filing for bankruptcy.
After a bankruptcy filing, many consumers want to know, which debts they should continue to pay, whether they can keep a particular credit card open, and which debts they should not continue to pay. The answer is that while you are under no obligation to pay back your unsecured debts (credit cards, medical bills, etc.) you may pay these creditors if you like, but it is not advised and could be a waste of your hard earned wages. It may make sense if you want to repay a friend or family doctor in order to remain on good terms, but for these people, they will usually just make you pay cash in advance the next time that you want to see them. It should also be noted that your credit cards are likely to be closed out and show zero balances on your credit report. Credit Unions and some lenders may ask you to repay them if you want to maintain a membership with them, but unless it is a nominal balance it typically does not make sense to repay these.
The debts that you should continue to repay after your bankruptcy filing include car and home payments for property that you want to keep or rent on an apartment as well as payments on debts that are not dischargeable in bankruptcy. These debts may include but are not limited to recent taxes, student loans, child support and debts from intentional acts or criminal activity.
If you need to know whether you should pay debs after filing bankruptcy please contact Symmes Law Group at 206-682-7975 or contact us via the contact form to schedule an initial consultation to discuss your options moving forward.