Why You Should Stop Making Credit Card Payments When You Decide To Declare Bankruptcy

If you've been struggling to financially keep your head above water, there may be a time that you decide that you cannot continue as you have been and that bankruptcy will be the most logical choice for you. There's a considerable chance that if you're leaning toward bankruptcy, you have a significant amount of credit card debt, perhaps even on multiple credit cards. While you might be inclined to attempt to pay off these cards or perhaps even just make the monthly minimum payments on them, you might be surprised to know that doing so is inadvisable. When you hire a chapter 13 bankruptcy lawyer, he or she will often suggest that you stop making credit card payments. Here's why.

Credit Card Debt Is Easy To Wipe Out

When you declare bankruptcy and your attorney begins to manage your case, you'll find that there are certain debts that are easily eliminated while others are not. Credit card debt is in the former category; your attorney will have little trouble getting this debt wiped out. This means that you'll be wasting your money by continuing to make payments until this happens. In a time that your available financial resources may be slim, this would be a poor use of your money.

Other Monthly Expenses Are Difficult To Eliminate

There are some other expenses that you'll need to continue to make payments on even after you declare bankruptcy. Individual cases can vary, but it's customary that you'll need to continue to make payments on your residence if you want to keep it. Similarly, if you're legally required to make child support payments, it's highly likely that you'll be required to continue to do so, even after you declare bankruptcy. You're better off keeping the limited funds that you have and using them for these expenses, rather than concentrating on your credit card debt.

You May Need To Pay Creditors

In many bankruptcy cases, you'll meet with your attorney and your creditors and begin to discuss payment schedules for some of them. Having some funds that you can use for this purpose will be more important than paying off a credit card. For example, depending on the specifics of your case, your attorney may be able to work out an arrangement in which you pay a certain percentage of what you owe to a creditor to eliminate the debt. Having some money available for such a purpose will be important.

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Coming To Grips With Your Financial Reality

You might feel like you understand your financial situation, but when was the last time you really analyzed it? If you are like most people, you might guess from time to time, which can leave you in a bind when the bills come due. Unfortunately, if things have gotten out of control, you might not feel like there is any hope. However, with the help of a bankruptcy attorney, you might be able to start with a clean slate. If you need more information about declaring bankruptcy, check out this blog. Here, you will find out the difference between bankruptcy types, what you stand to lose, and how the process unfolds.