If I just got an installment loan but plan on doing bankruptcy in three months, should I make my payments on it or just wait for bankruptcy? 22 Answers as of July 01, 2014

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Baner & Associates | Sandra M Baner
Depends upon the amount of the loan and other terms of the loan. Please discuss this with bankruptcy counsel.
Answer Applies to: Wisconsin
Replied: 7/1/2014
The Law Office of Mark J. Markus
The Law Office of Mark J. Markus | Mark Markus
If it is a loan secured by collateral, you should keep paying if you wish to retain the collateral. Otherwise, there is probably no need to make the payments, but you should expect that the creditor will file an objection to the discharge of that debt and probably prevail. Making 3 months of payments most likely won't change that probability.
Answer Applies to: California
Replied: 7/1/2014
Barnhart Law Office
Barnhart Law Office | Bruce C Barnhart
That depends on the type of loan and your objectives. If the loan is secured to a vehicle the lender may repossess the vehicle. You need to speak with your bankruptcy attorney for your answer.
Answer Applies to: Nebraska
Replied: 6/30/2014
Joseph Lehn, Esq
Joseph Lehn, Esq | Lehn Law, PA
Much depends if this installment loan is for a secured item. If the payments are securing a vehicle or other property, and you wish to keep that property, you will want to continue to make payments to keep the property. If there is no property secured, or even if there is, you are willing to give it up, you can stop making the payments.
Answer Applies to: Florida
Replied: 6/30/2014
Ronald K. Nims LLC | Ronald K. Nims
First, be certain that 90 days has passed between when you got the loan and when you file bankruptcy, otherwise the loan might not be discharged in your bankruptcy. Taking out a large loan, never making a payment then filing bankruptcy might raise questions of bad faith and/or fraud. There is no hard and fast rule but if the creditor files an objection, then your bankruptcy will get real expensive and could drag on for months, even years. Unless you can point to a concrete development in your life that forced you into bankruptcy after you got the installment loan, say, job loss, Obamacare cut you to 30 hours a week, disability, you're sued for a car wreck you caused, etc., I'd recommend that you make a payment or two.
Answer Applies to: Ohio
Replied: 6/30/2014
    GARCIA & GONZALES, P.C.
    GARCIA & GONZALES, P.C. | Richard N. Gonzales
    I would make a couple of minimum payments, to be on the safe side.
    Answer Applies to: Colorado
    Replied: 6/30/2014
    Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
    If you just applied for an installment loan knowing you were going to file bankruptcy rather than repaying the loan it is very problematic. That is fraudulent in nature. You should probably make more than just one or two payments, and probably wait a little longer than three months before filing your bankruptcy case. Better yet, hire an attorney to advise you and to guide you through the bankruptcy process.
    Answer Applies to: Colorado
    Replied: 6/30/2014
    EDWARD P RUSSELL | EDWARD P RUSSELL
    If it is an unsecured loan do not make any payments on it if you will be filing for bankruptcy? If it is secured on an asset that you want to keep then pay on it even though you will be filing bankruptcy.
    Answer Applies to: Minnesota
    Replied: 6/30/2014
    Hicks, Massey & Gardner, LLP
    Hicks, Massey & Gardner, LLP | Robert M. Gardner, Jr.
    In most cases, you would want to make the payment until you file to prevent the creditor from taking the property back. Also, if you plan on reaffirming the debt in a chapter 7, being current when you file makes that more of a possibility. Speak to the attorney you are going to have file your case to be sure what you should do, depending on what you want to happen to the collateral.
    Answer Applies to: Georgia
    Replied: 6/30/2014
    Garner Law Office
    Garner Law Office | Daniel Garner
    It would be advisable to make payments, if possible, to minimize the risk of the creditor objecting to the discharge of the loan on the grounds of fraud. If you take out a loan anticipating never to pay it, that is in fact fraud. The closer in time your loan is to your bankruptcy filing date, the greater the presumption against you. Timely payments would mitigate the presumption of fraud.
    Answer Applies to: Oregon
    Replied: 6/30/2014
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    Well, it would sort of depend on what kind of installment loan it is. For example, is it an installment loan to purchase new furniture or an appliance. If you don't pay for it, the lender will be able to reposes it. And you should be aware that under section 523 of the bankruptcy code, this lender can object to your bankruptcy because a debt taken out just before filing bankruptcy is presumed to be fraudulent, regardless of your intentions.
    Answer Applies to: Nevada
    Replied: 6/30/2014
    Idaho Bankruptcy Law | Paul Ross
    Depends on whether you are doing a 7 or 13, depends on whether it is secured or not. There are a number of variables that come to play. Visit with an attorney.
    Answer Applies to: Idaho
    Replied: 6/30/2014
    Kirby G. Moss PC | Kirby G. Moss
    That depends what the loan is for. If a car loan for example, you'll have to pay it to keep the car. If a simple unsecured loan, you probably should pay it so it doesn't appear you were contemplating bankruptcy when you got it.
    Answer Applies to: Indiana
    Replied: 6/30/2014
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    That is an ethical question. First, you should not be taking out loans when you know you are going to file for bankruptcy. Second, I don't know what chapter you are going to file. Third, I can not give you advice on how to commit what is essentially bankruptcy fraud.
    Answer Applies to: California
    Replied: 6/30/2014
    Law Office of Peter M. Lively
    Law Office of Peter M. Lively | Peter M. Lively
    Generally, a debtor who purchases a vehicle close to the bankruptcy petition date intends to retain the vehicle and must pay the entire balance (11 UST 506 is not available for purchase contracts within 910 days of petition date), so the debtor in this situation should make the monthly payments unless funds are desperately needed for another use.
    Answer Applies to: California
    Replied: 6/30/2014
    Danville Law Group | Scott Jordan
    Is the installment loan a secured loan, such as a car loan? Also, you probably should be asking this type of question on an open online service, because what you are describing is quite possible bankruptcy fraud. I suggest you contact a local bankruptcy attorney immediately to discuss under the protection of attorney-client privileged communication.
    Answer Applies to: California
    Replied: 6/30/2014
    Law Office of Melissa Botting | Melissa Botting
    Taking out a loan and quickly filing bankruptcy without ever making payment on the loan may very easily be considered fraud. You do not want to engage in fraud.
    Answer Applies to: Texas
    Replied: 6/30/2014
    LAW OFFICES OF CRAIG BURNETT | Craig Alan Burnett
    Sounds like you just committed fraud if you only recently took out a loan that you have no intention of paying back.
    Answer Applies to: California
    Replied: 6/30/2014
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    You had better make the payments. If you obtained an installment loan when you knew you were going to be filing bankruptcy in the near future and 3 months is near future, you are committing fraud. And the creditor may come after you to make the debt non-dischargeable. I have seen them do this even when the loan was made a few years earlier. Don't be surprised if they don't object, but it might help your argument if you can say, you had intended to make the payments and look you have been since you got the loan. Make sure you hire a bankruptcy attorney from the start, this is not a small no big deal thing.
    Answer Applies to: Michigan
    Replied: 6/30/2014
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    Make the payments. Otherwise, the creditor could sue for fraud.
    Answer Applies to: Nevada
    Replied: 6/30/2014
    Law Office of Shawn N. Wright | Shawn N. Wright
    I presume that this is an IRS installment payment plan. Are these income taxes? Are the income taxes dischargeable in the bankruptcy? How much is the payment amount monthly If it's a relatively small amount, then just pay it and don't rock the boat. Maybe these taxes are priority tax debt anyway, and would have to be repaid through a chapter 13.
    Answer Applies to: Pennsylvania
    Replied: 6/30/2014
    Steele, George, Schofield & Ramos, LLP
    Steele, George, Schofield & Ramos, LLP | Alan E. Ramos
    You should contact an attorney before you file a bankruptcy petition. The obligation may be non-dischargeable in bankruptcy.
    Answer Applies to: California
    Replied: 6/30/2014
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