What Do I Need To Pay If I’m Filing Bankruptcy?

 

When new clients meet with me for the first time, I often advise them that  as soon as they know they are going to be filing for bankruptcy within the next 90 days, they should stop paying any creditors.  The main reason for this is so any of those payments will not be treated as a preferential payment, and the trustee will not have to ask for that money to be given to the bankruptcy estate.  Another reason I advise this include that I want to make sure my client is as stable as possible going into the bankruptcy.  One of the few items I stress for my clients to pay as the bills become due are utilities and secured debts that involve assets the client wants to keep (such as a house or a car).  The utility companies do not negotiate — either you pay them and get their services or you do not pay them and do not receive their services.  A lawyer can do very little to no negotiating with a utility company.  In addition, if a client is behind on utilities going into the bankruptcy, the utility company can request the debtor submit a security deposit to ensure payment of services.  As for the secured debts, a creditor generally will not agree to the debtor reaffirming (read:  keeping) the debt and the asset unless the debtor has proven himself to be worthy by staying current.  So, in the end, pay your utlities and the bills for the things you want to keep!