Vail A. Kaufman, P.A.
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After Deciding to File Bankruptcy, Who do I Pay?

You have meet with a bankruptcy attorney and have decided to file a petition in bankruptcy. It may take some time to get all the information and documentation together. You have an idea of what happens after you file, but who do you pay right now?

1. You should continue to pay all of your normal living expenses. This includes the rent, utilities, insurance and food and clothing. Bankruptcy eliminates or controls past debt. It does not change the cost of living.

2. Unless your attorney tells you otherwise, you should not pay anything to the creditors on debts that you are walking away from and will be discharged in your bankruptcy.

3. If you have a vehicle and intend on keeping it, even for a short period of time, you should continue to make the regular contract payments.

4. If you own a home and intend on keeping it you should make the  mortgage payments if the mortgage company is accepting your payments. If you have a second mortgage or Equity Line of credit the answer is a bit more complicated. If you are filing a Chapter 7 case and want to keep the home you will likely need to continue to make the payment. If you are filing a Chapter 13 case the answer depends on whether or not the home has a value greater or less than the balance due on the first mortgage. If the home is worth less than the amount due on the first mortgage, your Chapter 13 Plan may include stripping the second lien off your house. if this is the case, you should not be paying the second mortgage.

5. Having decided to file a petition in bankruptcy you should not use your credit cards or borrow money. Debt must not be incurred in comtemplation of bankruptcy.

It is called "relief in bankruptcy" for a reason. A world spinning out of control because of debt is brought back to something you can handle. The relief can be had sooner than you think.

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Vail A. Kaufman, P.A.
8955 Edmonston Road
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Greenbelt, MD 20770

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