Should I Stop Paying My Bills Before Filing for Bankruptcy?


Money’s tight when you’re considering bankruptcy, so it may be beneficial to choose to pay some bills over others. Specifically, it may be more beneficial to stay on top of secured debts like your mortgage and auto loan over unsecured debt like your credit card balance or medical bills.

The reason for this is that both Chapter 7 and Chapter 13 can help you get rid of debt, but you may not be able to get rid of secured debt without giving up the collateral tied to it. This means staying on top of debts secured by property you wish to keep should stay at the top of your priority list – especially when you’re low on cash and unsure of which bills to pay.

Prioritizing Debt Obligations Before Bankruptcy

Consult with a bankruptcy lawyer for personalized guidance for your situation, but there are other debts you may want to pay even before those tied to collateral.

If you owe any kind of non-dischargeable debt such as child support, spousal support, and tax debt, you might want to pay these before all others. Barring the 10-year statute of limitations on tax debt, these debts never expire, and neglecting to pay them can result in interest, penalties, and even criminal charges.

Should I Pay Any of My Unsecured Debts Before Bankruptcy?

When you can afford all other debts but don’t have enough to pay off unsecured debt, you should consider prioritizing these by necessity.

For example, paying your utility bills to keep water and power going to your home might be more important than making a relatively insignificant dent in your medical bills. Likewise, paying your cell phone bill to avoid losing service is probably more important than paying down a credit card balance that will just continue to accrue interest.

Contact a Legal Professional for Guidance

It can be hard to navigate the various challenges that bankruptcy presents. Our lawyers at Buchalter & Pelphrey Attorneys At Law can help you through it all. If you need specific legal guidance custom-tailored to your unique legal situation, we can offer the support and services you require.

For more information, contact Buchalter & Pelphrey Attorneys At Law online.

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