Who to Pay. How Do You Decide??

[sisterfunkhaus]

We aren't filing BK just yet. I'm hoping to recover somehow before doing that, but I think it could be a HUGE possibility in the next year b/c we have been living on the edge for a while. I know that you aren't supposed to make preferetial payment in 60 or 90 days beofre filing BK. But, we aren't filing for at least 6 months to a year if we file.

Here's my question. We do not have the $$$ to pay all of our bills. I will have to cut someone out. How do you decide who NOT to pay??? Should I rotate who I pay and who I don;t pay or would you pick one or two creditors not to to pay ever again??? I don't know how to decide. I want to pay my secured loans and bills first. We can do that.

[GoingDown]

We aren't filing BK just yet. I'm hoping to recover somehow before doing that, but I think it could be a HUGE possibility in the next year b/c we have been living on the edge for a while. I know that you aren't supposed to make preferetial payment in 60 or 90 days beofre filing BK. But, we aren't filing for at least 6 months to a year if we file.

Here's my question. We do not have the $$$ to pay all of our bills. I will have to cut someone out. How do you decide who NOT to pay??? Should I rotate who I pay and who I don;t pay or would you pick one or two creditors not to to pay ever again??? I don't know how to decide. I want to pay my secured loans and bills first. We can do that.

Your credit will be ruined even if you pay some unsecured creditors or rotate payments with several different unsecured creditors. So, my advice is to not pay any unsecured creditors ever again. Only pay what you need to pay to get by-- mortgage payments, car payments, utilities, and then save the rest back.

Because, if you can't pay off a credit card in full within a relatively short time then you are just throwing money away on interest charges and eventually things like late fees, etc.

[anonymuse]

This response is geared toward bk-planning, not at saving your credit scores:

Pay what you plan to keep--mortgage, car

Pay your utilities--otherwise, even though the debt would be discharged in BK, you would need to pay deposits to get service back

Student loans--if you have any, adjust to minimum payments or defer (they're very easy to work with)

Medical bills--if there's a doctor you really want to keep, like you're GP, make minimum payments

Credit cards--you can let them slide, but get caller id ;)

[Rover]

I concur with GoingDown and anonymuse, only pay your secured debt that you want to keep if you are definitely going to file BK. You are accomplishing nothing by paying a few unsecured creditors.

You do have to make a decision though regarding whether you will be filing BK. If you can't pay your bills, your decision is pretty much made for you unless you are judgment proof and can live for years with judgments on your record.

Even if you stop paying your unsecured debt, you shouldn't have any problem waiting six months to a year before filing if you need to do that for some reason. Not much can happen to you in that period of time if you take the right steps (such as defending any law suits that are filed around six months or so after you stop paying unsecured debts).

[sisterfunkhaus]

Thanks guys. I agree with what you are saying. Since we will most likely end up filing, we ARE throwing money down the tubes if we pay ANYONE.
After missing even a couple for two months on a few bills, we wouldn't be able to catch up even if things do come around for us. We have no savings and barely make it month to month with all of our bills. I just now put it all on paper and can not beleive how many credit cards we have!! We have 13, plus we have several with zero balance (they will stay that way.) I don't know how we've managed this long I need to sit down and see if we will qualify for 7 or have to go with 13.