Did you pay credit cards up until you filed?

[sydneynoel]

I'm filing chapter 7 in Dec. I've decided to let the bigger credit card bills go unpaid to help save money to pay our attorney. But I was wondering what you all have done about the smaller ones. I think paying $10 or $20 min. payments on the smaller cards is worth it just to keep the creditors off your back. I will already be batteling 5 major creditors from Sept. thru Dec. There are some though that have min. payment due of 50.00-100.00...I can't decide what to do with these bills. Just let them go along with the bigger bills ranging from 200-600/payments? Do you think paying as much as possible on as many possible actually helps your FICO score rebound after filing? Right now, we have pretty decent FICO scores. I pulled them a few days ago and mine is 686, hubby has a 744. I got to admit it's going to be pretty tight coming up with our attorney fee's ($1,800) so I might not even have a choice on paying on some or all of them. I was just wondering if anyone thinks paying on them (or as many as possible) will even benefit our FICO score after all is said and done. Thanks for the advice. This site is great!

[Boscoe]

Hi sydney.

First of all, I would retain the attorney you have chosen. You can probably pay them a $300-$500 retainer at first, and then pay the rest just before you file. Once you do that, don't worry about the creditors - send them all to your attorney. Or just screen your calls through your answering machine.

Now, in regards to your credit - there are those on this site that don't seem to think that paying the creditors anything is worthwhile. I tend to think that minimizing the # of bad marks on the credit will help rebound it faster. We shall see, as I am supposed to get my discharge on Columbus Day.

From the research I have done, one of the big positives for your credit score is length of credit history. As a result, I would try to have at least one card with lots of history (i.e. your card that you opened the farthest back in the past) have no balance as of bk date.

Then, assuming it gets closed by the creditor (which is likely, but not 100% definite), you will still get benefit of the good credit history going forward for 10 years. The others will say "Included in bk" and stay for 7 years. If you make all payments up until 30 days before you file, there will also be no "lates" on your credit for that creditor, which I believe will help too (although others here disagree).

[Beach Bum]

Boscoe is correct. It will make the credit cleanup much simpler after you file as well as hold you credit scores up a little. If you can afford to keep paying you may want to try???
Although it is basically throwing your money away, you may retain it in the future as a better interest rate due to a higher score.
It's a toss up.
We stopped paying on everything a month before we filed and during our credit clean-up some Trade Lines are still showing 30 days late, which is in fact true or correct. Other TL's aren't showing any lates.
Fewer lates = higher scores. But keep in mind that the lates stop effecting your score just after 2 or 3 years.

[HHM]

To put Boscoes and Beach Bums advice in perspective. The first decision is the financial decision. Can you afford to make the payments. If the answer is no, then you should not kill yourself trying to pay a few minimum payments. There is a diminishing return on keeping your credit up pre-BK. Look at it this way, all the cards you file BK on are going to show Included in BK anyway, in the long run, its doesn't matter whether you made those last 2 monthly payments before filing BK.

What is going to fix your credit AFTER BK is TIME, and the credit you acquire after BK.

In your situation where you have already stopped paying on some, and only have a few that you could even consider paying. Honestly, your talking about paying a few hundred bucks for "maybe" 5-10 points on your credit. IMHO, I don't think it is worth it in the grand scheme of things.