Interest charges on credit card debt in 100% plan

[greenthinker]

Hi All,

I just had this frightening thought about the amount of interest our credit card accounts have accrued from the time we stopped making payments (over 6 months ago) to the time of filing (within the next couple of weeks). I'm concerned because I know that we will be paying back 100%, which to me means that we could be paying back thousands of dollars of additional interest. Is that what will likely end up happening? Or, will we more likely end up paying only the outstanding balance at the time of default?

Any thoughts or experiences to share?

Thanks!

[lrprn]

After filing, non-secured creditors like credit cards can no longer charge you interest. Your non-secured creditors will be paid their portion of what you owed them on filing day, so in your case that amount will include the interest they charged you each month up to the day you filed.

The good news is that your non-secured creditors won't get a penny more than what you owed them on filing day. Best of all, you'll emerge at the end of your plan owing them nothing. That would not be the outcome if you continued to try to pay all of them with money you didn't have for five years. You'd be in much worse shape than having to pay them a few months of higher interest.

Hang in there. You'll feel better about filing once you get a little farther down the bk road.

[forgotten]

That is one of the reasons for the default APR. The bank is trying to get your balance as high as they can, as fast as they can. The higher your balance the more they can potentially reclaim in a BK case and/or write off as a loss.