Should I payoff my credit union before filing 13/7?

[scmami]

Ok, this whole process has started and stopped several times for my husband and I, but as of today we have our attorney 95% retained and are just gathering all of the necessary info to (hopefully) file a Chapter 7. We have one very small loan balance with our credit union that we would like to payoff before filing if it will not look like a preferential payment or whatever you call it. The payoff is $347. We have been consistently paying $85/month on time payments to them because if we don't, they just take the money out of our acct anyway. I told the attorney that we've still been paying them and he says it's ok for now. I am worried about telling them we are filing and them taking the money out of our acct anyway! Should we pay them? We have only paid on our vehicles, student loans, and utilities besides this one acct. We stopped paying CCs July 08 when we were going to originally file, but changed our minds....long story. Please help!!

[StartingOver08]

This is where you have some flexibility. The amount that you owe is extremely small. It is probably not worth the Trustee going after the $347. If you file BK on the CU for whatever amount, even a small one, they will close your accounts. If you want to keep the CU as your bank, you might want to pay them.

Technically it is considered a preferencial payment if it is made within 90 days of filing:

http://www.moranlaw.net/preferences.htm

If you are going to get another bank account, then don't pay them. In either event, the Trustee deals directly with the creditor, the CU, during the BK if they determine they want to pull the preferencial payment back from the CU.