Thinking about filing for bankruptcy to gain a fresh start? Well, you probably have a million questions, first of which may be, “What Bills Do I Continue to Pay After I File for Bankruptcy?” If only the answer was a simple one. The answer in reality is, “it depends.” It really depends on which bills you are thinking about. Different types of bills are treated differently!
Whether you should stop paying your creditors depends on:
- the types of debt you have
- how soon you expect to file your case, and
- whether you are filing for Chapter 7 or Chapter 13 bankruptcy
While every case is unique, and we suggest that you consult your bankruptcy attorney, here are some examples to help you out.
- Mortgage – Your mortgage is classified as a secured debt in bankruptcy. This means that your lender has a right to foreclose on your house if you default on your payments. A bankruptcy discharge eliminates your personal liability for a mortgage loan but in most cases it doesn’t remove the bank’s lien on your property. Therefore, you should continue making your regular mortgage payments during bankruptcy.
- Car Loans – Similar to your mortgage, car loans are secured debts. If you want to keep your car, you must continue making payments on the loan. If you do not want to keep the car, then stop making payments.
- Credit Cards – If you know you’re going to file bankruptcy, you should stop paying your credit cards immediately. Once you receive your discharge, your credit card debt is wiped out.
- Utility Bills – If you’re filing for bankruptcy, you may want to stop paying your utility bills ONLY if they are already delinquent. And in that case you may only want to pay for your current usage if you’re at risk of a disconnection. Once you file bankruptcy, your gas, electric and water company will not be able to disconnect your service for nonpayment of bills prior to your bankruptcy.
- Alimony and Child Support Payments – Domestic support obligations such as alimony and child support are not dischargeable in bankruptcy. This means that you can’t wipe out your obligation to pay these debts through bankruptcy. You must continue to pay these bills. If you need to have the courts reassess you ability to do so then you may need to petition to do that but not through the bankruptcy petition.
Every case is different and knowing which bills you should continue to pay can be confusing. Talk to a bankruptcy attorney at Levine Law to discuss the specifics of your case.