Adam Law Group Blog

When can You Stop Paying on Debts After Filing for Bankruptcy?

If you plan on filing for bankruptcy, you are likely left wondering various questions including when you can stop paying creditors. The short answer is that you should not. Despite this, many people stop paying creditors shortly before filing for bankruptcy and use this money to pay for the bankruptcy filing costs.

If you intend on filing for bankruptcy but are not sure exactly when you will do so, however, it is common to end up wondering if it is okay to stop paying your debt. While there is no universal sign that a person should stop paying his or her debts, the following considers some common signs that it might be a good idea to do so. 

Planning Ahead

It is a good idea to have a bankruptcy time frame created before you decide to stop paying on a debt. If you plan on filing for Chapter 7 bankruptcy, you will first need to pass a means test. If you pursue Chapter 13 bankruptcy, however, you will be required to follow a several-year repayment plan that requires you to have the income to repay your debts. 

It is critical to have an idea of how long bankruptcy will take as well as a date of when you want to file before you even begin considering when it is time to stop paying on your debts.

The Role of Automatic Stays

When you file for bankruptcy, automatic stays are put into place. These stays prohibit creditors from collecting on your debts. Creditors also cannot take adverse action of any sort against you while a stay is in place. 

Given the powers of automatic stays, some people only decide to stop paying their debts when the stay is placed. Otherwise, there is a risk that you might end up facing late fees or penalties for debts that you declined to stop paying on in preparation for bankruptcy.

Consider What Types of Bills You Have

While there are some types of debts that a person can delay paying for some time before they end up facing adverse actions, other debts require prompter payment. For example, if you do not pay a utility bill, it often does not take long before the service is shut off. Meanwhile, it is often possible to avoid paying on medical debts for some time before adverse actions are taken against the debtor. 

When considering what types of bills to pay, consider if something that you depend on can be lost if you do not pay the bill. While not paying a medical bill will negatively impact your credit score, you will not directly lose anything by not immediately paying on the amount.

Contact an Experienced Florida Bankruptcy Attorney Today

If you are faced with a large amount of debt, bankruptcy can be the best method to take control of the situation. A knowledgeable bankruptcy attorney can best prepare for you the process as well as promptly answer any questions that you might have. Contact Adam Law Group today to schedule a free case evaluation.