How to Handle Bills Before and During Bankruptcy

If you are thinking about declaring chapter 7 bankruptcy, you probably know all too well how troublesome bill collectors can be. Once you fall behind, they can contact you constantly and harass you endlessly. Read on and find out more about handling bill collectors and your bills before and after you file.

Before you File

You can't prevent bill collectors from contacting you until you have filed for bankruptcy. You can tell them that you have a lawyer and that you are about to file, however. That may allow you some breathing room. However, legally, they can continue to contact you until you can provide them with the federal case number for your filing.

Paying Bills Before and After Filing

Once you file, you will no longer need to pay some of your bills. However, you should speak with your bankruptcy lawyer before you stop paying certain bills. Some debts cannot be dissolved with chapter 7, and you might want to keep some of your property as well. However, filers can probably stop paying the following bills if you expect to file in the next week or so:

• Credit cards
• Medical debts
• Personal loans
• Payday loans

Other debts should be paid, however. Keep paying your rent or mortgage, your utilities, child support, spousal support, legal fines and penalties, and any IRS installment payments.

Once You File

Talk to your bankruptcy attorney about the following categories of bills. They are known as secured debts because they are attached to properties. You might want to keep some of the below property, and you will need to continue paying the monthly bills for these debts:

• Mortgage payments should be paid if you intend to stay in your home. However, if you intend to abandon it or your lawyer tells you that it must be surrendered, you don't have to pay the mortgage anymore. Ask your lawyer about using the homestead exemption to protect your home.
• Auto loan payments should continue to be paid if you want to keep your vehicle. Ask your lawyer about reaffirming your auto loan. That means you continue to pay the loan and you can keep the car if exemptions cover it.

When you stop paying some of your bills, you will get an idea of how much easier it will be to cope with your budget once you file. However, don't stop paying something unless you get the go-ahead from your bankruptcy lawyer. Speak to a bankruptcy lawyer to find out more.