When people file bankruptcy they are seeking legal protection from creditors and repaying or eliminating debt. However, the question of when to stop paying creditors when people are planning to file bankruptcy is often a confusing part of considering the bankruptcy option. Overall, it’s best to keep paying creditors until bankruptcy cases are filed. That’s when people have the legal protection called an automatic stay which prohibits creditors from pursuing or continuing with foreclosures, wage garnishments or lawsuits. However, when trying to save money individuals may not have a choice to keep paying all their bills.
Paying Creditors Depend On the Type of Creditors
According to Kurt O’Keefe, attorney at law, whether people stop paying creditors when they plan to file bankruptcy depends on the type of credit. For instance, individuals trying to keep or maintain their personal property should continue to pay creditors. Typically, the types of creditors include mortgage and car companies.
Keep Paying Creditors That Provided Needed Services
It’s vital to continue to pay on services that people use. For example, individuals should keep paying on bills from the water, gas, cable, electric, telephone and internet companies. For people with outstanding balances with utility companies (which doesn’t include internet companies), don’t worry about trying to pay the balances off. Once bankruptcy cases are filed and they are listed as creditors a new bill will be sent out. The new bill will not include the past balance. However, keep in mind that cable and internet companies aren’t considered utility companies. Unlike utility companies, people can obtain cable and internet services from more than one company.
Unsecured Creditors May Not be Worth Worrying about
Unsecured creditors such as credit card companies and payday lenders may not be a priority. Thus, people can stop paying credit card companies when they are trying to save money. According to Kurt O’Keefe, attorney at lawyer, people are just waiting money.
Seek the Help of an Experienced Bankruptcy Lawyer
Creditors want their money, but individuals must consider what payment option is best for them. Thus, a bankruptcy lawyer will advise people considering with creditors to stop paying before they file bankruptcy. The lawyer will talk with individuals, sort out their options and make recommendations on what which debts to pay. For instance, the bankruptcy lawyer may suggest filing for bankruptcy instead of stop paying creditors.
