Paying cc and not mortgage?

[B12]

I have seen posts here regarding paying your mortgage and not paying cc's. It seems that preferential payments is not a problem doing this.

But, what if you pay the cc and not the mortgage?

Here is the problem. I am letting the house go. I want to make one or two more payments on a balance transfer that I did. I only made two payments on it and the amount was 9000. I am thinking that I should pay all the cc minimums when I do this, to avoid the preferential payment problem of paying one cc and not another.

If I stop paying the mortgage, but continue to pay the cc's for two more months after I stop paying the mortgage, do I have a preferential payment problem?

Anyone ever have to do this?

[dumbdumb]

If I stop paying the mortgage, but continue to pay the cc's for two more months after I stop paying the mortgage, do I have a preferential payment problem?

Anyone ever have to do this?

Are you filing Chapter 7?
If you know you are definitely filing bankruptcy Once you file bk the creditors will cancel all your accounts anyway good or bad that in mind why would you pay anything except the things you want to keep. such as making your car payment in order to keep your car after bk.
I would think the only reason why you would pay for credit cards is because you have just made a recent purchase. but i am not too sure if you have to make a payment .. just delay the bk filing?? anyone?

[JRScott]

Paying your mortgage is not considered preferential because it is secured debt that you would have to pay on in a Chapter 13 or a Chapter 7 if you planned to keep it.

However since credit card debt is not secured then it can be considered preferential if you pay a sufficient amount to a single creditor (I think 600 dollars in 3 months time). This can though save you on your credit report from a few hits however the Trustee can go back and demand the money that was preferential and redistribute it.

You should never pay VISA and MC before you pay for food, housing, transportation and utilities. If you do plan to let the house go, then the best place for your money would be to look for a new place to live.

[B12]

Thanks, but misunderstood my question.

The reason I would still pay all cc's is so as to not have a preferential payment problem. Want to keep paying because I want to make 3 or 4 payments to this one balance transfer.

I am chap7 and letting house go.

Anyone understand what I am trying to ask?

[aa06a47]

Thanks, but misunderstood my question.

The reason I would still pay all cc's is so as to not have a preferential payment problem. Want to keep paying because I want to make 3 or 4 payments to this one balance transfer.

I am chap7 and letting house go.

Anyone understand what I am trying to ask?

I understand, you don't want the creditor to object to discharge...right? You feel if you make a few payments prior to filing bankruptcy, you'll be less under the radar. Preferential payment is not your issue here. Secured debt would not be treated as a preferential payment.

Not knowing your financial situation from this post, can you sell your home and not need to file bankruptcy?

If BK is your only choice, I would wait at least 4-6 months after the cash advance to file.

[Bandit]

Thanks, but misunderstood my question.

The reason I would still pay all cc's is so as to not have a preferential payment problem. Want to keep paying because I want to make 3 or 4 payments to this one balance transfer.

I am chap7 and letting house go.

Anyone understand what I am trying to ask?

I think I know what you mean. House will foreclose & go to auction sooner or later anyway & you want to go chapter 7, use those funds to pay the cc for the transfer/advance to be in good faith.

If you pay on the house you wont be able to make all CC payments plus the one that has the transfer. I know what you are saying because I see that day approaching for me as well where I am going to have to make a choice on who to pay. It is like the Titanic just before it breaks in half & goes to the ocean floor or so that is how it feels for me.

Only other thing I could think of is making soft payments to a couple of them while paying the whole amount due those months with the transfer? Would that work?
I am pretty sure I know what you mean but not sure about the best solution. Honestly, I think you have it the right way.

What you are doing is not really preferential in terms they think of unless it goes over a certain amount to one creditor, though it seems like it to us.

[B12]

You got it bandit.

I would be paying the cc's and NOT the mortgage to make a few more payments on the balance transfer.

I am including the house in the BK eventually.

I guess what I am asking is, Will the mortgage company yell "preferential payment" because I paid the cc and not them?

[Bandit]

I am pretty sure that wont happen at all. But it might happen if you did the other way (pay the house & not the transfer).
The bank is getting the house as that is their security & there is no big loss if you don't pay.

Just a side note, I know when this all went down with my Grandmother, she could have stayed in the house for about 5 months (maybe longer) 'after' her BK before they actually came to tell her to take a different residence. Of course we had arrangements in advance & way before that.
This is another reason I know you are doing it the right way.

The preferential you are thinking of is something different & is between the trustee & the CC, not you & not the mortgage.

I wish I could explain that better or have a link for you to follow.
lrprn can explain it better than I can.

Though it may not seem right to us, The way you are thinking is the best way. At least I can say that is the way I would do it & the way I will be doing it when it comes to transfer. I don't have the mortgage but I do have some "Pauls' that I will have to stop paying so I can get back some favor with "Peter".
Isn't is kind of weird how this all goes down trying to land as safely as possible?

[Bandit]

I had one more thought on this, I wonder what it would be like if everyone was paid a little?

I mean we get to the end & realize a choice has to be made. So instead of deciding who to pay & who not to pay, just send what you can to them all?

The only other thing would be where you miss a payment but send them a payment next month. Maybe that would be better than not making any payments at all to the mortgage?

I know some people have gone on for a very long time doing that. I know someone who put the wrong check in the wrong envelope, so payment for the electric bill ends up at the mortgage company & vice versa, so no one gets paid that month.

This has me scratching my head now. It gets so stupid after awhile.

[B12]

Ah, good point on the mortgage lender. They have the house which is just about even, not upside down yet, but it will be soon with the market the way it is.

Thanks for clarifying my statement. I meant, will the trustee yell pref payment of cc's over mortgage, but I guess he does not care since debt is secured.

[Bandit]

Hey B12

I have a question. What if you were to go ahead & foreclose before you enter a BK. Would that help the over all situation & ease any stress? I mean, would that help you so you would not have to file a BK?, thus this particular mortgage is out of the picture.
I know that appears very backward because usually we would want to keep the house. Only you can see for sure the big picture all the way around including what the housing market is like where you are...etc.

Then later enter a BK on the transfer & any other debt... if you still have to?
I am trying to figure out the softest way to land, is all.

I stayed up half of the night trying to locate cases with absolute resolution to transfer over mortgage & the 90 day thing- but could not locate any.
I do know if the payments to one place is over $600 in 90 days, they could go back & get that money to distribute evenly with all the other creditors, so don't forget that part.

Have a look at this thread especially the last post in this thread & let me know what you think. He thought he would have to file BK but his attorney said he would not have to. Whenever you get there, your attorney might tell you the same thing.

http://www.bkforum.com/showthread.php?t=17408

I don't know if it will be exactly the same for you, but it might be.