What is the best way to allocate little income before bankruptcy? How? 12 Answers as of May 15, 2015

I just lost my and should be receiving severance pay. I will not be able to pay my monthly expenses because my income will not be sufficient. I have negative equity in my house and significant credit card debt as well. I am almost certain that bankruptcy will be my final option as I have no savings either. Should we continue trying to pay our credit card bills even if we cannot pay our mortgage or how should would our money be best spent until the bankruptcy? On daily expenses?

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Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
If you are going to file, stop paying the cc debt. I have attached instructions on how to get them to stop calling you.
Answer Applies to: California
Replied: 5/15/2015
Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
Retain an experienced bankruptcy lawyer without delay. He or she can Review all the facts with you, and help youske the best decisi?n.
Answer Applies to: Wisconsin
Replied: 5/14/2015
Ronald K. Nims LLC | Ronald K. Nims
I generally advise people who are temporarily unemployed to delay filing bankruptcy until they have a new job. ?If you file bankruptcy now, additional bills - that you can't pay - will pile up and they won't be discharged because they'll be after your filing date. Wait until you've been hired but before you start your new job and you'll be able to put the financial crisis behind you without a lot of bills dragging you down.
Answer Applies to: Ohio
Replied: 5/13/2015
Danville Law Group | Scott Jordan
You should begin planning now. If you do not think you will be able to find new employment quickly, you need to decide how best to spend your money while you look for employment. Your priority should be to provide for the basic necessities of life such food, clothing and shelter (not necessarily in that order). Your credit cards are dischargeable in bankruptcy and should be the last items to pay, if at all. Be careful, though, not to add any new debt. What you really should do is schedule an hour consultation with a local bankruptcy attorney for ideas on how to best prepare for bankruptcy.
Answer Applies to: California
Replied: 5/13/2015
A Fresh Start
A Fresh Start | Dorothy G Bunce
I would be using my savings to pay for necessary living expenses, not old debt. Bankruptcy can eliminate debt but you still have to pay the rent, the power, the car insurance and buy groceries.
Answer Applies to: Nevada
Replied: 5/12/2015
    R. Steven Chambers PLLC | R. Steven Chambers PLLC
    Each case is different but in general I recommend not paying any bills that you intend to discharge in bankruptcy. You won't get any points for being current on your credit cards when you file. If you intend to surrender your house there is no point in paying the mortgage either. You should, however, speak with an attorney about how you can best spend that money so the trustee doesn't have a claim for a preferential or fraudulent transfer.
    Answer Applies to: Utah
    Replied: 5/12/2015
    Garner Law Office
    Garner Law Office | Daniel Garner
    The credit card debt should be your lowest priority. If you want to keep your house, it is best to stay current on the mortgage payments if you can. Then prioritize living expenses, cut wherever you can, and don't borrow any more money. Recently acquired debt might not be dischargeable in bankruptcy. Don't repay any loans from relatives or friends, because those are considered preference payments which the trustee can recover from you or from the recipients. Be aware that your severance pay will be given special scrutiny and could be used against you in the "means test" which determines whether you can do a chapter 7 straight liquidation or a chapter 13 repayment plan. An experienced bankruptcy attorney could help you plan how best to use your severance pay.
    Answer Applies to: Oregon
    Replied: 5/12/2015
    Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
    You should use your limited funds for your current living expenses and, you should seriously consider hiring a lawyer to advise you and guide you through the bankruptcy process. The money you pay in legal fees will be money well-spent to get it done properly!
    Answer Applies to: Colorado
    Replied: 5/12/2015
    Law Offices of Daniel J Winter
    Law Offices of Daniel J Winter | Daniel J Winter
    It is important that you consult with a bankruptcy lawyer now, as this part of the planning is important to get right.
    Answer Applies to: Illinois
    Replied: 5/12/2015
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    If you are filing a bankruptcy then do not pay credit card debts as they will be discharged anyway.
    Answer Applies to: New York
    Replied: 5/12/2015
    GARCIA & GONZALES, P.C.
    GARCIA & GONZALES, P.C. | Richard N. Gonzales
    Don't spend a penny until you speak with an experienced BK lawyer. I charge a small fee for a one hour meeting. You will receive lots, and lots of information at the meeting. You will get back ten times what you pay me for the meeting. I have over thirty years experience, and I have helped THOUSANDS of people. If you don't meet with me for one reason or another, meet with an experienced lawyer so you know what to do over the next 6 to 12 months.
    Answer Applies to: Colorado
    Replied: 5/12/2015
    Patrick W. Currin, Attorney at Law | Patrick Currin
    If you are going to file, there is no need to pay credit cards, it merely complicates the process. You will need to pay your mortgage unless you plan to leave your home, which you perhaps should depending on the amount of debt and the payment.
    Answer Applies to: California
    Replied: 5/12/2015
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