Can a recent payment to store credit card affect bankruptcy? 24 Answers as of August 05, 2011

I have over $20,000 dept in credit cards that I haven't used in over a year (and didn't pay them over a year). I do have one store credit car that I used twice in last year and I'm making regular monthly payments on it. So I made a last payment in July. Can that be a problem if I file for chapter 7? I am planing to file within next two weeks. And should I pay of that card( it is small amount balance) and close it before I file or no?

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Bankruptcy Law office of Bill Rubendall
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
A recent payment to a credit card will not negatively affect the filing of bankruptcy. Don't pay one creditor over another in anticipation of bankruptcy.
Answer Applies to: California
Replied: 8/5/2011
The Law Office of Jacqui Snyder
The Law Office of Jacqui Snyder | Jacqui Snyder
Do not pay it off. A regular minimum payment should not pose a problem. A payment more than $600 over the minimum payment should be disclosed in the Statement of Financial Affairs. If that is the case, the trustee may ask you about it at your 341 hearing. They may be interested in pursuing the amount from the bank.
Answer Applies to: Ohio
Replied: 8/5/2011
The Port Law Firm
The Port Law Firm | Edward Port
Certain debts are non dischargeable that are used within 90 days of filing which are over $600 to this creditor. Sincerely, Edward N. Port DISCLAIMER The information in this reply does not constitute legal advice and should not be relied upon for any bankruptcy planning purposes. Bankruptcy planning is necessarily very circumstance-specific and therefore the reply is only intended to educate. Additionally, the information given in this reply is not meant to be a substitute for legal representation. You should consult with a local attorney regarding your suitability for the information stated herein under your local laws. The Port Law Firm, PA shall not be considered your attorneys until a fully-executed client retainer agreement is executed. Further, any tax consequences that may incur in the implementation of the strategies herein should be reviewed by an independent professional tax advisor. Nothing in this reply should be construed to be any advertisement for legal services directed to a state wherein The Port Law Firm, PA is not admitted to practice. Nothing in this reply is any substitute for the services of a licensed attorney in the relevant jurisdiction. The Port Law Firm, PA does not practice in any jurisdiction unless one of its attorneys has been admitted to practice there, or an attorney of the firm has been properly admitted pro hac vice according to the local court rules of that state.
Answer Applies to: Florida
Replied: 8/5/2011
Indianapolis Bankruptcy Law Office of Eric C. Lewis
Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
It shouldn't be a problem for you but if the payment was over $600, the court can reverse the payment and spread it out equally among all your creditors.
Answer Applies to: Indiana
Replied: 8/5/2011
Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
Once you make the decision to file Bankruptcy, stop paying the credit cards. The only payments you should make are those that you need, like a car payment, rent or mortgage, utilities, etc. Paying off the credit card will be considered a preference and may result in the Trustee may be able to force the creditor to return that money.
Answer Applies to: New Hampshire
Replied: 8/5/2011
    Law Office of John C. Farrell, Jr.
    Law Office of John C. Farrell, Jr. | John C. Farrell, Jr.
    The credit card debt should be part of the bankruptcy estate including this debt. I would consult with the bankruptcy attorney regarding the handling of this debt before you take any further action. If your heart is not set on filing bankruptcy there is an aggressive alternative which is debt negotiation/settlement-which can eliminate debt faster. In most cases people can reduce their debt and are out of debt in 2 to 4 years.With much debt, especially credit card debt, many people have already paid back more than they originally charged on their cards. Regrettably, they are now stuck in the vicious cycle of paying off interest and penalties and other fees that have accrued, often over many years.
    Answer Applies to: Massachusetts
    Replied: 8/5/2011
    Theodore N. Stapleton, PC
    Theodore N. Stapleton, PC | Theodore N. Stapleton
    Probably not. I am happy to discuss your options with you
    Answer Applies to: Georgia
    Replied: 8/5/2011
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    You cannot prefer on unsecured creditor over another. One of the questions you have to answer is whether you have paid any one creditor $600 or more in the last 90 days. If so, the trustee will go out and get the money back and spread among all unsecured creditors.
    Answer Applies to: Michigan
    Replied: 8/5/2011
    Grasso Law Group
    Grasso Law Group | Charles Grasso, Esq.
    Paying on a particular credit card won't directly affect you. However, when you fill out your bankruptcy petition, you will be asked to list any recent payments made to creditors. The trustee will look at this to determine if the amount was significant, and if so, the trustee can reclaim those payments and disperse the funds fairly among all the creditors.
    Answer Applies to: California
    Replied: 8/5/2011
    Apple Law Firm PLLC
    Apple Law Firm PLLC | David Goldman
    Your bankruptcy lawyer can see what the use and payments were for and if that will cause a problem. Generally it will not, but the payment may be taken back by the trustee and distributed amongst the other creditors.
    Answer Applies to: Florida
    Replied: 8/5/2011
    Lake Forest Bankruptcy
    Lake Forest Bankruptcy | Anerio V. Altman, Esq.
    You should be fine to file your Chapter 7 without paying that off. If you file, they may come after you, but the chance is small, and you can settle the debt if they do in the bankruptcy.
    Answer Applies to: California
    Replied: 8/5/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Of no consequence.
    Answer Applies to: California
    Replied: 8/5/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Your question indicates you plan to file without a lawyer. DON'T. Pro se bankruptcies usually go badly. Recent payments and charges can be a problem in bankruptcy and paying an account before filing has to be reported in the case and may add to the problems. The size and date of the charges and payments matter, and an attorney will determine when and if you should file. Making a mistake on timing can be costly.
    Answer Applies to: Georgia
    Replied: 8/5/2011
    Melinda Murphy Dionne, PC
    Melinda Murphy Dionne, PC | Melinda Murphy Dionne
    Your payment on your store card will not create any problems for you in your bankruptcy case. People get into trouble for running up their cards prior to bankruptcy but not for making payments to regular creditors. If you made a very large payment, the Trustee might have the ability to recover the payment from the creditor but that will have no impact on your or your ability to receive a discharge. I would not recommend paying off the card. It is unlikely that you will be able to retain credit privileges even if you pay the card off. Include the debt along with all of your other credit cards. Bankruptcy can seem very scary but it is a simple and uncomplicated process when done correctly. Good luck and enjoy your fresh start free of overwhelming debt.
    Answer Applies to: Alabama
    Replied: 8/5/2011
    Braunstein Law, PC
    Braunstein Law, PC | Jacob Braunstein
    There is a section in the bankruptcy petition that asks about recent payments to creditors. You should consult with an attorney regarding the specific consequences of paying off any one creditor prior to filing.
    Answer Applies to: Oregon
    Replied: 8/5/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    No, don't pay it off. Usually of you're making payments in the normal course of business it won't be a problem. If you're only paying one, you.should have a good reason. If that's the only card you've used, that might.be a good reason.
    Answer Applies to: Virginia
    Replied: 8/5/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    Paying a regularly scheduled credit card payment will have no effect on your bankruptcy. If you pay off a credit card, they may revoke your credit card due to filing bankruptcy, even with no balance due.
    Answer Applies to: California
    Replied: 8/5/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    You will lose that card. Even if you pay it off. The fokes who hand out credit cards also buy information on who files bankruptcy. So even if they are not listed, they will find out and close your account.
    Answer Applies to: California
    Replied: 8/5/2011
    Kalra Law Firm
    Kalra Law Firm | Madhu Kalra
    Fact that you made payment in July, 2011 on a credit card, should not affect you ability to file Chapter 7 bankruptcy, if you are otherwise eligible.
    Answer Applies to: California
    Replied: 8/5/2011
    Judith A. Runyon, Esq. Attorney at Law
    Judith A. Runyon, Esq. Attorney at Law | Judith A. Runyon
    Not necessary to pay it off, as they will not let you use it after filing Bankryptcy
    Answer Applies to: California
    Replied: 8/5/2011
    The Law Offices of Kristy Qiu
    The Law Offices of Kristy Qiu | Mengjun Qiu
    If the total sum of the payments you have made to that one particular credit card is over $600, you will have to list it on your bankruptcy petition - Statement of Financial Affairs - because it's counted as "preferential" payment voidable by the trustee. It won't affect your bankruptcy at all, but the trustee will initiate an adversary proceeding against the credit card company to get the money back, so that he or she can distribute the amount pro-rata among all your unsecured creditors. If you don't know what the Statement of Financial Affairs is or have no idea how to complete it, I highly suggest you hire a lawyer, or the trustee will make that recommendation at your meeting of creditors.
    Answer Applies to: Florida
    Replied: 8/5/2011
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    You should have no problem with any of your cards. I do not recommend paying off the card. It may result in the trustee recovering the payment to share with all creditors in any event.
    Answer Applies to: Nevada
    Replied: 8/5/2011
    Eric J. Benzer, Attorney at Law
    Eric J. Benzer, Attorney at Law | Eric Benzer
    Yes
    Answer Applies to: Maryland
    Replied: 8/5/2011
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