Is it advisible to talk to creditors when planning to file for CH7 BK?

[illlitius]

I am planning to file for ch7 bk but its not for certain. Ever since, I have stopped talking to my creditors because I am afraid of saying something wrong that can hurt my future Ch 7 BK case.

Would it be okay to talk to my creditors(OC) telling them I intend to pay them back (even though I know full well that it is only a small possibility?). Will this be considered "Abuse/Fraud/etc" or hurt my Ch7 BK discharge chances?

And if it is okay to talk with them, is there anything else I should avoid saying?


Thanks in advance.

[tcreegan]

Hi illlitius,

I have heard some hearsay about legal ramifications behind telling creditors you will pay or are going to file BK. So I deliberately kept it vague "I can't do anything until [date]" The date was a couple days after our filing date. When they asked for something, anything, I kept up the sob story, "I can barely pay for prescriptions, there isn't anything I can do until [date] at the earliest" "Can you put me down for a call on [date]?" (and not call until then) Worked for me...

Tom in Colo

ps: Anyone have solid info on informing creditors about an impending BK?

[maffy]

tcreegan is right, keep it vague!

When I first stopped paying my creditors, I wasn't sure what I was going to do either. I've read a lot of posts on this site (it is such a godsend!). One mentioned to "never" make a commitment (in writing or verbally) that you don't know you can fulfill (sorry can't remember who posted, so I can't give them credit). That was so helpful to me! When creditors called, I told them "all I can tell you at this point in time, I don't have the money to pay you right now".

Yes, they get impatient and press for more info, but I just kept repeating it to them.. after all, it was the truth. Some calls are taped, so you don't want them coming back on you for a verbal agreement down the road. But answering the phone every couple of weeks at least makes the calls stop for a few days, or at least did for me.

I recently retained an atty. So now time I can now give them his contact info, because we're not too far off from filing and finally the calls have stopped! Hang in there... get your plan in place and it will all work out..

[Snax]

We didn't tell our creditors what we were doing until we had actually retained our attorney. Most of them will think you are blowing smoke about filing anyway, so it's easier to suggest that you might be able to make a payment at some future date without actually committing to it in any permanent way. It often stops the calls until then. At some point however, we intentionally allowed our voice mail to fill up and left the home phone off the hook most of the day until we began the process in earnest. After that, providing our attorney's info stopped the calls almost entirely - though one of the creditors apparently tried to call us this weekend, just two days before our 341. I wasn't in, but my wife was, and I wish she had answered the phone to see what they had to say about it. ;)

[frogger]

In my opinion, there is no good or valid reason to tell your creditors anything about your financial status if you are going to file bk. Everything you say can and will be used against you by your creditors, so just do what you need to do and stay silent.

[AlmostAmos]

Keep it vague & don't tip your hand... I led them on for 7 months with the usual "i can't do anything right now but I'm hoping to get back on my feet. you are wasting your time by bugging me every hour as I don't have .02 to my name". They actually quit calling.

[AngelinaCatHub]

In my opinion, there is no good or valid reason to tell your creditors anything about your financial status if you are going to file bk. Everything you say can and will be used against you by your creditors, so just do what you need to do and stay silent.

Agree. Most people hang themselves with their tongue. You are most likely being recorded. If you tip them off to an impending bk, you could trigger an early suit. What you say may also be used as an implied reaffirm. If you know the caller ID, I would avoid answering the phone. Let them figure it out. If you are "thinking" of bk, and are not paying every bill, it is almost sure that you will decide to go that rout anyway. 'Hub

[illlitius]

Thank you everyone for all your advice, suggestions and encouragement.

So basically it is okay to talk to your creditors as long as you don't tell them anything besides not being able to pay and will try best to pay in the future.

In my opinion, there is no good or valid reason to tell your creditors anything about your financial status if you are going to file bk.

Yes, if I knew 100% for sure I think I wouldn't be as hesitant ignoring them but there is a small possibility I might not file BK. Most of my debts came from business expenses and investments and the chances of returns are very slim.

However, if returns were to come back where I can pay back my debts/settle I would rather do that than file BK. If this scenario were to happen and I found myself able to pay back my debts, would it make any difference whether or not if I had a lawsuit or judgement against me?

Example scenario 1: May 2011: 5 lawsuits, 3 judgements against me. Summer 2011: investment returns came back and I paid all my judgements and debts back.
Example scenario 2: No lawsuits/judgements against me. Summer 2011: investment returns came back and I call my OC/CA's and settle.

I prefer scenario 2, but is there really any difference between scenarios? I mean paying back a judgement and pending lawsuit any different than settling without lawsuits/judgement?

And if scenario 2 is better, does talking to my creditors make any difference? My logic for wanting to talk to my creditors is to try to avoid/slow down lawsuits from happening. (although I do not know if talking would make any difference or not, especially since I have nothing to give or negotiate with.)

[BrokeinMD]

I turned my ringer off and screened my work number and cellphone until I filed. I didn't want them having me saying anything about my debt on file. Why do you want to speak to them anyway? It's not going to make your credit score any better. I loved the letters I received, "Protect your credit score, give us a call today to talk about your financial situation. Don't threaten your financial future.....blah, blah, blah". When I pulled my credit report, they already reported me 90 days late, 120 days late, etc. So another words, the credit score was in the crapper, so talking to them will do you no good. Talking to them will not make you sleep better at night. Filing will. Just my opinion....

[Snax]

My favorite tag line is "Credit is an asset." Until you use it that is . . :P

[BrokeinMD]

My favorite tag line is "Credit is an asset." Until you use it that is . . :P

It'll knock you on your asset....LOL

[JackBondLove]

My stock answer was:

I have determined that as of this moment, my cash flow situation has deteriorated to the point that I am unable to completely meet all of my debt obligations, and on the advice of an attorney, if I cannot meet the obligations to every creditor, that I should not pay any of them.

When they ask if I was going to file BK, my response was:

As of yet, I have not officially retained the services of an attorney for the purpose of filing BK, although I have had some discussion about doing so in the future

When asked when I would be filing BK, my response was:

I am currently reviewing all my options concerning debt reduction settlement and possible sources of generating cash via loans or liquidation of exempt assets to meet such settlement. You are encouraged to make any type of settlement offer, as the lower the total settlement amount is, the less of a probability that BK will be filed.

And whenever a rep would say that (s)he was on a recorded line (for "customer service" reasons, never for legal reasons ... RIGHT! ), I would say that since my telephone number has an area code for a state that allows unilateral recording without having to inform the other caller, I could be recording the conversation as well. The rep from Chase would always say that I did not have permission, to which I would say that I don't need permission, to which (s)he would always end the call. Sometimes the (non-Chase) rep would ask if I was actually recording, to which I would respond that I was not going to tell her, to which sometimes (s)he would end the call, but sometimes stay with the call.