Once you decide to file for bankruptcy, you can stop paying your creditors. However, this general rule only applies to debts that you can legitimately discharge in bankruptcy. Thus, you can stop paying your credit card bills, but not the mortgage on the home you intend to live in, the car you intend to keep, and student loans.
What if you can’t file for months?
That’s ok. The rule is if you intend to file for bankruptcy you must stop using the credit cards. You then can stop paying on them. If you have excessive spending leading up to a filing, there will likely be a presumption that you anticipated filing. There is a six month window of time prior to the filing that the Court will look at if a creditor brings it to the Bankruptcy Court’s attention. Most of our clients have stopped using their credit cards long before contemplating, or filing, for bankruptcy protection.
What if the creditor calls us?
The creditors will likely call once you miss a payment. However, we tell our clients to direct the creditors to us. “You have a lawyer, direct the creditors to him,” says Attorney Burns. “Say, we don’t want to talk, we have a lawyer, and his number is 617-227-7423. Please don’t call us anymore.” We inform creditors’ of our clients that our client intends to file and that the Bankruptcy Court will send out an official notice once the case is filed.
What if the creditor’s agent harasses us, calls us at work?
Again, we recommend you retain an experienced Boston bankruptcy lawyer, such as Neil Burns, and have your lawyer respond to the calls. It’s not harassing to us; it’s our job to respond to these creditors.
Will the creditor file a lawsuit?
Sometimes. However, if you have an attorney who will talk to the creditor, they usually will not file a lawsuit over commercial debt. Of course, if you are behind on a mortgage or a motor vehicle loan, they may very well file to secure their asset.
What if they attach my wages?
If they file a lawsuit it is possible that they will be able to attach wages. Usually we have our clients file for bankruptcy protection before that. This is because you are given notice of a lawsuit and have sufficient time to file an Answer to the Complaint and to oppose a motion to attach wages.
Can I stop paying my student loans?
It is very difficult to discharge student loans in bankruptcy; the law, written by the same folks who back up the student loans (the US Congress) requires “undue hardship” which has come to mean absolute inability to repay ever. On the other hand, you can negotiate your loans, or work with the Court if you have to.
Will they repossess my vehicle?
Not likely. If you pay on your motor vehicle loan they are not likely to repossess it. Repossession is expensive and, after costs, the creditor usually looses out.
How do I work with my lawyer regarding the creditor calls?
Give your lawyer a copy of all your credit card bills and simply tell the creditors to call the lawyer. Your lawyer will respond to all calls by informing of the situation.
Call Attorney Neil Burns for a free consultation.
