Trying to Save a CC

[LaurieM]

I just double-checked with the bankruptcy attorney for whom I do petition preparation - payments made to anyone POST filing are irrelevant. This is what frightens me about this forum. Please, please people... see a professional when you ask questions and you get conflicting answers on this forum or answers that just plain don't make sense.

[backtoschool]

It's probably a waste of money Oscar. I had two credit cards with very small balances, maybe 70.00 that I paid before filing, thinking they may not be closed. Guess what.. They said thanks for the payment but due to the filing we're closing your account. I also had a number of other credit cards I hadn't used in over a year with zero balances on them for department stores, and even an HSBC card, and they went and closed those too. I would follow your attorney's advice. If you had excellent credit before you filed you'll probably get offers for cards after your discharge. We were just discharged in early October and Capital One has sent my wife three offers for an unsecured card with no annual fee and 0% for like 10 months.

I agree. The majority of credit cards do not survive filing bk, even if they have a perfect payment history and zero balance.

[CreditCretin]

It's probably a waste of money Oscar. I had two credit cards with very small balances, maybe 70.00 that I paid before filing, thinking they may not be closed. Guess what.. They said thanks for the payment but due to the filing we're closing your account. I also had a number of other credit cards I hadn't used in over a year with zero balances on them for department stores, and even an HSBC card, and they went and closed those too. I would follow your attorney's advice. If you had excellent credit before you filed you'll probably get offers for cards after your discharge. We were just discharged in early October and Capital One has sent my wife three offers for an unsecured card with no annual fee and 0% for like 10 months.

[backtoschool]

So... using that logic... if a debtor owes a family member money prior to filing and knows that it would be deemed a preferential payment so pays nothing to the family member until after filing... payments made from the day AFTER filing until the debtor's discharge could be seized by the trustee as an asset of the estate?

I am not understanding your confusion LaurieM. You cannot choose which creditors to pay if you file bankruptcy. That is a decision for the trustee. The trustee makes all financial decisions for you regarding assets and credit while your case is open. If you reaffirm your debt and do not discharge it and enter a formal reaffirmation agreement, that is another matter, but that has to be approved by the trustee.

[backtoschool]

Yes. It happens all the time.

[LaurieM]

So... using that logic... if a debtor owes a family member money prior to filing and knows that it would be deemed a preferential payment so pays nothing to the family member until after filing... payments made from the day AFTER filing until the debtor's discharge could be seized by the trustee as an asset of the estate?

[backtoschool]

Read my comment again... I said "POST" filing, not pre filing. I believe that the original poster was inquiring about continuing to pay the credit card "after" filing, hoping that he/she would still have access to credit. I may be incorrect in my interpretation of what his/her question was hower.

I read your comment and I get what you mean, but until the case is discharged and closed, the trustee can take any asset he wants and put it into the estate. That payment to an unsecured creditor would be an asset (assuming the OP made other payments to the creditor over time that make the total payments to that creditor over $500). The OP is not discharged.

[LaurieM]

I disagree. Paying one unsecured creditor pre-discharge at the expense of the other creditors is considered a preferential payment and it is not allowed. The trustee will take the money back from the creditor and pay it out to all creditors. Paying that creditor will turn your case into an asset case with the payment being an asset that will be distributed to all creditors. You can pay priority secured creditors post filing, but not unsecured creditors.

Read my comment again... I said "POST" filing, not pre filing. I believe that the original poster was inquiring about continuing to pay the credit card "after" filing, hoping that he/she would still have access to credit. I may be incorrect in my interpretation of what his/her question was hower.

[backtoschool]

I respectfully disagree. You can opt to pay any unsecured debt you want to post-filing. The trustee has NO interest in any payment you make to creditors post-filing. In fact, if you bank at a credit union, many won't let you continue to bank with them unless you do. I won't argue the point that it would be silly to actually do so given that filing bankruptcy is meant to relieve you of unsecured debt. Your mail box will be full of credit card offers post-filing. Why? Because you become a prime candidate for credit card companies - you have filed bankruptcy so they can justify charging you ridiculous rates and they know you cannot refile for another 8 years.

I disagree. Paying one unsecured creditor pre-discharge at the expense of the other creditors is considered a preferential payment and it is not allowed. The trustee will take the money back from the creditor and pay it out to all creditors. Paying that creditor will turn your case into an asset case with the payment being an asset that will be distributed to all creditors. You can pay priority secured creditors post filing, but not unsecured creditors.

[LaurieM]

You cannot selectively keep cards in bankruptcy. Any card that has a balance on it is part of your petition and will be closed. You cannot pay the creditor. That is considered a preferential payment and the trustee will go after the creditor for the money you pay them anyway.

Expect most if not all of your accounts to be closed. Sometimes a few store cards survive.

I respectfully disagree. You can opt to pay any unsecured debt you want to post-filing. The trustee has NO interest in any payment you make to creditors post-filing. In fact, if you bank at a credit union, many won't let you continue to bank with them unless you do. I won't argue the point that it would be silly to actually do so given that filing bankruptcy is meant to relieve you of unsecured debt. Your mail box will be full of credit card offers post-filing. Why? Because you become a prime candidate for credit card companies - you have filed bankruptcy so they can justify charging you ridiculous rates and they know you cannot refile for another 8 years.

[backtoschool]

Our bankruptcy was filed Monday, Oct 20. I have a cc with a small balance ($300.00) that I was intending to pay when the bill came in, but lawyer told me not to, that I needed to include everything that had balances. (341 hearing is set for 11/29).

Is it worth me calling the cc company and asking if I pay this in full to them at what ever point I am allowed to, will they agree not to cancel my account? If so- when is the right time to do this?

I've had excellent credit for the past 30+ years. My spouse is the problem here (won't bore you with the details!). I am already getting letters from some of my cc accounts (all with zero balances) saying "thanks for not including us, and we are canceling your acc't.

Any advice?

You cannot selectively keep cards in bankruptcy. Any card that has a balance on it is part of your petition and will be closed. You cannot pay the creditor. That is considered a preferential payment and the trustee will go after the creditor for the money you pay them anyway.

Expect most if not all of your accounts to be closed. Sometimes a few store cards survive.

[nokia123]

i had one card with no balance and cc company closed it.

[IBroke]

If you already filed and the CC had a balance that day, it is included in your BK. In that case, it makes NO sense paying it.

[wnguyen]

I would follow your attorney's advice (and people's here) and NOT pay that credit card, it's $300 of hard earned $$ wasted there. Paying them won't guarantee you the cc will be saved.

[drowning123]

That's right, Oscar. Don't waste your $300. The account will be closed. And please do list the cc as a creditor, as it may come back to haunt you in the future.