Chris Layton

My Charlotte bankruptcy clients impress me every day with their desire to be responsible and to keep promises they have made. Usually, that includes a desire to pay credit card bills up to the day of filing for a Chapter 7 or Chapter 13 bankruptcy. For this reason, once we know they have decided to file bankruptcy, they are reluctant when I give them the advice to stop paying on credit cards. But that’s exactly the advice I give them, because we are about to eliminate credit card debt from their life.

Once you decide to file a bankruptcy, it’s important to take every step possible to protect your money and begin creating positive cash flow for yourself. Your focus needs to be on having enough money for your family. To provide for them and keep them healthy. The debt to the credit card is going to be discharged as part of the bankruptcy, so there is no longer a reason to pay it. And there’s no reason to feel guilty about it—you’re only exercising your rights under the bankruptcy code.

This is debt forgiveness. You are not doing anything wrong. It’s OK to walk away from these debts with your attorney’s guidance.

By the time they have decided to file, most clients have stopped using their credit cards or have maxed them out. While this may be true, sometimes clients have one credit card they would like to keep paying on in hopes of keeping it after the bankruptcy. The fact is most creditors—even if you have not been late and are up to date—will close your credit account the day they find out your are filing bankruptcy. So paying on one card in hopes the creditor will allow you to keep it is not advisable. Not to worry, you will be offered credit shortly after filing, and there are options you can pursue for getting a secured credit card as well.

Additionally, while you can choose to keep your home in a Chapter 7 or Chapter 13 bankruptcy, if you know you are going to walk away from your home, you should stop making mortgage payments when you know you are going to file bankruptcy. Speak with your attorney about the amount of time you will typically have to remain in the home after you stop making payments but again, the goal is to create positive cash flow and also have money available to move to another home.

These decisions are challenging. It is your Charlotte bankruptcy attorney’s job to help you understand what your options are and help you to make a decision. If you’d like more information, use the contact us form, complete our online bankruptcy evaluation, or call me at 704.749.7747. You can make a change today.