default on payments to credit cards, loans, et al before filing bankruptcy??

[chicken]

Did try searching multiple forums before asking...

We are currently having a tough time paying monthly bills as my business has had its worst year in the 30 years. I have already taken out $60k from my solo 401k to keep up with payments for the business lines of credit and my own monthly mortgage and living costs over the course of 4 months.

If I do need to file for bankruptcy, is it a good idea to stop paying all my loan bills to save money and keep my retirement assets in tact? My home has no equity in it after factoring in the mortgage and business line of credit attached to the home.

I have no business assets as it is an import business.

My idea was to default on my loans especially the mortgage/ cc/ business lines to save my 401k from being drained. I could ideally still live in my home for "free" until the forclosure process starts months later.

Do most people default on payments before filing or file while still current on their obligations?

[keepmine]

It's a waste of money to keep paying debts that will be discharged in bk.
It's just good pre bk planning to keep exempt assets in tact like, the 401K.

[mmptysmom]

Agree with keepmine.If you've decided to file don't waste your money.....

[bcohen]

No, don't take money out of your retirement savings just to pay off debts which will be discharged anyways! In fact, you should have never taken out the $60k which you already wasted! Once you have decided to file for bankruptcy, quit paying ALL unsecured debts, as well as ALL secured debts for property which you intend to surrender. You should do this even if you are planning to wait several months, or even a year prior to actually filing.

BTW, I quit paying ALL my debts back in March of 2009, and did not file for bankruptcy until April of 2013. The reason is because no one bothered to sue until September of 2012--more than 3 years after I defaulted on everything!

[Blossoms]

Depending on where you live, you can conceivably stay in your house for 1-3 years, after it goes into foreclosure. My mother's house is in foreclosure. She hasn't made a mortgage payment is over two years now, and her house is just now getting close to going up for sheriff's sale. And by "close", I mean she likely will be able to stay in the house for at least another 6 months. You won't get evicted from your house the minute it goes into foreclosure.

[chicken]

thank you all for your advice and input...what a great forum!

I think the best course of action for me is to stop paying all my obligations starting today and wait to file for bankruptcy when eviction is imminent.

I can keep my business going (if I'm not bleeding money) until I file also.