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